Using Flexdoesn't come without risks.
Before using the protocol, users are advised to understand how it works and the risks involved.
Flex is a decentralized, non-custodial protocol. Users are fully responsible for their own actions.
Smart Contract Risk
Flex is implemented using smart contracts.
While the contracts may be audited, audits do not eliminate risk. Bugs, vulnerabilities, or unexpected behavior may result in loss of funds.
Do not use Flex with tokens you cannot afford to lose.
No Bailouts
Flex does not provide bailouts.
Losses caused by market conditions, execution prices, liquidations, redemptions, bugs, or any other unexpected scenario are not reimbursed by the protocol or any third party.
Immutability and No Privileged Users
Flex contracts are immutable.
There are no admin keys, no privileged users, and no ability to pause, upgrade, or modify the protocol after deployment.
While there may be upsides to that, it also means issues cannot be patched after launch.
Market and Execution Risk
Flex relies on market mechanisms to function.
- Borrowers may have their Troves redeemed
- Collateral sold during redemptions or liquidations may execute at unfavorable prices
- Lenders exiting during low liquidity periods may incur costs
Prices are determined by the market and are not guaranteed.
Liquidation Risk
Borrowers are responsible for maintaining sufficient collateral.
If a Trove falls below the minimum collateral requirement, it may be liquidated and closed, resulting in loss of collateral.