Risks Disclosures
Introduction
This document outlines the risks associated with using the Smooth Fund platform and services. Investing in digital assets involves significant risk and is not suitable for all investors. It is important that you understand the risks involved before making any investment decisions.
Cryptocurrency Risks
Cryptocurrency investments involve substantial risk and may result in the loss of your invested capital. Risks include:
- Extreme price volatility and potential for significant loss
- Regulatory uncertainty and potential changes in law
- Security vulnerabilities and risk of hacking
- Market liquidity risks and potential inability to exit positions
- Technical failures and operational risks
- Potential for permanent loss of assets due to lost private keys
- Vulnerability to novel technical flaws and attacks
- Risks of forks, discontinuation, or devaluation of digital assets
Lending Risks
Participating in cryptocurrency lending activities carries additional risks, including:
- Default risk of borrowers
- Collateral depreciation risk
- Smart contract vulnerabilities
- Interest rate volatility
- Counterparty and custodial risks
- Liquidation risks during market downturns
- Platform solvency risks
- Risks associated with algorithmic determination of interest rates
Yield Generation Risks
Our yield generation strategies involve additional risks, including:
- Smart contract and protocol risks
- Strategy performance risks - past performance is not indicative of future results
- Risks associated with automated trading systems
- Market-neutral strategies may not perform as expected in all market conditions
- Grid bot trading strategies have specific risks including range-bound market assumptions
- Impermanent loss for liquidity provision strategies
- Concentration risks if multiple users follow similar strategies
Operational Risks
The platform itself carries operational risks, including:
- Technology failures or downtime
- Cybersecurity threats and potential hacks
- Third-party service provider failures
- Key personnel risks
- Business continuity challenges
- Risks associated with code deployment and updates
Regulatory Risks
The regulatory landscape for cryptocurrencies and digital assets is evolving and uncertain:
- Future regulatory changes could adversely affect platform operations
- Varying regulations across jurisdictions create compliance challenges
- Tax treatment of digital assets is complex and evolving
- Potential for regulatory actions against certain digital assets or platform activities
- Potential restrictions on access to banking and financial services
Market Risks
Broader market conditions affect all investment activities:
- General market volatility affects cryptocurrency prices
- Correlation with traditional markets during stress periods
- Liquidity constraints during market downturns
- Impact of macroeconomic factors on cryptocurrency prices
- Risk of market manipulation in smaller or less liquid markets
Important Disclaimer
Smooth Fund does not provide investment advice or recommendations. All investments are made at your own risk. We strongly recommend consulting with a financial advisor before making any investment decisions.
Risk Management Strategies
Consider these risk management strategies when using Smooth Fund services:
- Only invest what you can afford to lose
- Diversify your investments across different asset types
- Stay informed about market developments and regulatory changes
- Understand the specific risks of each service you use on our platform
- Use appropriate security measures to protect your account and assets
Updates to Risk Disclosures
These risk disclosures may be updated from time to time to reflect changes in the platform, services, or regulatory environment. Please check this page regularly for updates.
Questions
If you have any questions about these risks or need further clarification, please contact us at risk@smooth.fund before using our services.