Risk Disclosures

IMPORTANT: This page contains risk disclosures related to the use of decentralised finance ("DeFi") protocols and digital assets. Please read these disclosures carefully before using any Solstice products or services.

Interacting with DeFi protocols, including Solstice, involves substantial risks. The value of digital assets can fluctuate significantly and you may lose some or all of your investment. Past performance is not indicative of future results. You should not invest more than you can afford to lose.

1. Smart Contract Risk

Solstice operates through smart contracts deployed on the Solana blockchain. While our smart contracts undergo rigorous security audits by reputable third-party firms, no audit can guarantee the absence of all vulnerabilities.

• Smart contracts may contain undiscovered bugs, vulnerabilities, or logic errors that could result in the loss of deposited funds
• Interactions between multiple smart contracts may produce unexpected outcomes that are difficult to predict or detect in advance
• Upgrades or modifications to smart contracts, even when intended to improve functionality, may introduce new risks
• The Solana runtime environment and virtual machine may contain vulnerabilities that affect smart contract execution

2. Market Risk

Digital asset markets are highly volatile and subject to rapid price movements. Market conditions can change without warning.

• The value of tokens, including SLX and USX, may decrease substantially in a short period of time
• Yield rates are variable and may fluctuate based on market conditions, protocol utilisation, and other factors beyond our control
• Historical yields and returns are not guarantees of future performance
• Macro-economic conditions, regulatory developments, and market sentiment can adversely affect digital asset valuations
• Concentrated exposure to any single protocol or asset class increases the potential for loss

3. Liquidity Risk

Liquidity conditions in digital asset markets can change rapidly and without notice.

• You may not be able to liquidate or exit your position in a timely manner or at a favourable price
• Market-wide liquidity events (such as widespread de-leveraging) may temporarily or permanently impair the ability to redeem or trade assets
• Certain vault strategies or lock-up periods may restrict your ability to withdraw funds for a defined period
• On-chain congestion or network outages may delay transactions and prevent timely execution

4. Regulatory Risk

The regulatory landscape for digital assets and DeFi protocols is rapidly evolving and varies significantly by jurisdiction.

• Laws and regulations governing digital assets may change, and new regulations may be introduced that could restrict or prohibit the use of certain products or services
• Regulatory actions in one or more jurisdictions could adversely affect the availability, functionality, or value of the Services or related digital assets
• You are solely responsible for understanding and complying with all applicable laws and regulations in your jurisdiction
• Tax treatment of digital asset transactions may be uncertain and may vary by jurisdiction; you should consult a qualified tax advisor

5. Custody Risk

Solstice is a non-custodial protocol. You maintain control of your private keys and digital assets at all times when interacting directly with the protocol.

• Loss of your private keys or wallet credentials will result in permanent and irreversible loss of access to your funds
• Solstice cannot recover lost private keys or reverse transactions on the blockchain
• Third-party wallets and key management solutions may have their own security vulnerabilities
• Phishing attacks, social engineering, and other fraud schemes may target users of DeFi protocols; exercise caution with all communications

6. Stablecoin Risk

USX and related instruments are designed to maintain a stable value relative to their reference asset. However, no stablecoin is entirely free of risk.

• Stablecoins may temporarily or permanently deviate from their intended peg due to market conditions, collateral quality, or protocol mechanics
• The underlying collateral backing a stablecoin may lose value, potentially affecting the stablecoin's redeemability
• Algorithmic or hybrid stabilisation mechanisms may fail under extreme market conditions
• Regulatory changes may affect the issuance, transfer, or redemption of stablecoins in certain jurisdictions
• Reliance on oracles for price feeds introduces additional points of failure; oracle manipulation or downtime may affect protocol operations

7. Technology and Infrastructure Risk

The Services depend on the continued operation and security of underlying blockchain infrastructure.

• Blockchain network congestion, outages, or forks may disrupt access to the Services or result in failed or delayed transactions
• Dependence on third-party infrastructure providers (validators, RPC nodes, oracles) introduces risks outside our direct control
• Software updates to the Solana network or ecosystem tooling may introduce incompatibilities or require protocol adjustments

Financial Disclaimer

Nothing on this website or in any Solstice communication constitutes financial, investment, legal, or tax advice. All information is provided for informational purposes only.

You should conduct your own due diligence and consult with qualified professionals before making any financial decisions. Solstice Labs does not recommend or endorse any specific investment strategy.

By using the Services, you acknowledge that you have read, understood, and accepted the risks described in this document. You agree that Solstice Labs shall not be held liable for any losses arising from your use of the Services.

For questions about these risk disclosures, please contact us at solstice.finance/contact.