Risks (WIP)

Smart Contract Risk

Caution should be exercised when interacting with any smart contract or blockchain application. While risks are attempted to be mitigated through testing, audits and bug bounties, there is always a risk of vulnerabilities in smart contract code.

hUSD Withdrawal Queue

Say there are 2 traders, Alice and Bob. Alice has a profitable position and realizes their PnL in form of hUSD margin. But bob has not yet realized their -ve PnL. In that case, margin account contract prints unbacked hUSD, which will eventually be returned when Bob pays their debt back. Now, while system is in this state and if too many people want to redeem their hUSD for USDC, then some users will have to wait until bob pays their debt back.

Liquidations caused by low AMM liquidity