Risks
Managed-custody risk
The Vault keeps principal and promised USDC protected on-chain. Approved manager strategies and surplus withdrawals are limited to balances above those liabilities. Manager authority, indexing accuracy, and implementation defects remain custody risks. The Stats page discloses principal owed, USDC owed, reserves, and reconciliation age.
Smart-contract risk
Faults in authorization, native-asset accounting, NFT escrow, time handling, fee math, or cross-contract assumptions may cause loss. The current implementation is unaudited and must not hold valuable assets.
Oracle risk
Incorrect O2 publication, source-asset mapping errors, updater outages, or simplified-oracle defects can affect opening values or block new positions. The shared oracle averages up to 120 six-hour O2 bid samples and fails closed after 25 hours without an accepted update. A young sample set has less smoothing, and the external updater is outside Fuel Earn's control. Independent price-divergence and freshness monitoring remain required. Testnet stFUEL uses the FUEL price 1:1 and therefore does not model liquid-staking exchange-rate risk. Mainnet stFUEL remains disabled until an authoritative rate is approved.
Liquidity and strategy risk
Reserve-backed issuance and protected-balance checks are designed to keep claims liquid. Approved strategies may still lose deployed penalties or surplus. Published coverage is evidence, not a guarantee against implementation faults.
Market risk
A buyer acquires an existing position and all its risks. Asking price is not fair value. Transactions are irreversible after finality. The 10 bp fee is deducted from seller proceeds.
Legal and regulatory risk
Transferable fixed-term positions may be treated differently across jurisdictions. Public materials should not call them bonds until counsel approves. Sanctions, consumer disclosure, tax, and securities analysis are prerequisites for mainnet.
Operational controls
Mainnet requires a multisig, timelock where practical, updater continuity, alerting, reconciliation, tested pause procedures, and published incident contacts.