Risks
Managed-custody risk
Deposited collateral may leave the Vault for approved manager strategies. On-chain liabilities do not guarantee immediately liquid collateral. Redemption can fail until assets are returned. The Stats page must disclose liquid collateral, deployed collateral, 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
A compromised signer, incorrect O2 publication, source-asset mapping error, or HyperFuel outage can affect opening values or make quotes unavailable. The adapter uses the bid, rejects data older than 60 seconds and spreads over 200 bp, caches validated data for only 15 seconds, and otherwise fails closed. Quotes are short-lived and domain-bound, but signer rotation, independent price divergence monitoring, and review are still required. Testnet stFUEL deliberately 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
The Vault may lack collateral or USDC when a claim is due. Approved strategies may lose funds or delay withdrawal. Published coverage is evidence, not a guarantee.
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, separate oracle key, alerting, reconciliation, tested pause procedures, and published incident contacts.