Risk Disclaimer
Risk Disclaimer
Investing in YieldFi-issued Tokens involves material financial, legal, and operational risks. You should carefully consider these risks before acquiring Tokens. While YieldFi seeks to design robust infrastructure and risk controls, no system can eliminate risk entirely. This summary is not exhaustive. Full risk disclosures are set out in the Product Documentation and, where applicable, the formal prospectus.
Where a prospectus exists, the offering is made exclusively on the basis of that prospectus. Any investment decision must be based on a review of the prospectus as a whole. Regulatory approval of a prospectus (where applicable) does not constitute an endorsement of the quality of the Tokens or the Issuer.
Third-Party Protocol and Ecosystem Risk
Tokens may reference or be economically linked to strategies that interact with third-party protocols, infrastructure providers, custodians, exchanges, or DeFi applications. These third parties operate independently and may fail, be exploited, become insolvent, change their rules, or cease operating. Such events are outside YieldFi’s direct control and may materially impact performance or redemption.
Strategy and Market Risk
Token value may be directly or indirectly influenced by market conditions, asset prices, liquidity conditions, volatility, funding rates, or strategy performance. Strategies may underperform or incur losses, particularly during periods of market stress. Past performance is not indicative of future results. Investors may lose some or all of their capital.
Smart Contract and Technology Risk
Tokens rely on smart contracts and blockchain infrastructure. Risks include software bugs, exploits, oracle failures, governance attacks, cryptographic vulnerabilities, chain re-organisations, and network disruptions. While audits and security practices reduce risk, they do not eliminate it.
Liquidity and Redemption Risk
Tokens may be illiquid. Secondary markets may not exist. Redemptions may be delayed due to market disruption, operational constraints, compliance checks, or illiquidity in referenced markets. You may be unable to exit at your desired time or price.
Execution and Operational Risk
Delays, technical failures, congestion, misconfiguration, or operational breakdowns (internal or external) may prevent strategies from being executed as intended. Such failures may result in losses or reduced performance.
Counterparty Risk
YieldFi relies on external service providers such as custodians, exchanges, banks, infrastructure providers, and protocol operators. Failure, insolvency, fraud, hacking, or misconduct by any counterparty may result in losses.
Regulatory Risk
Regulation of cryptoassets and tokenised instruments is evolving globally. Changes in law, regulation, or enforcement may require product restrictions, geographic limitations, feature suspension, or discontinuation, which may affect Token utility or value.
Tracking Error
Token pricing or redemption value may not perfectly reflect any reference value or Underlying due to fees, timing differences, market conditions, illiquidity, or operational constraints.
Qualified Subordination Risk
All Tokens are issued as subordinated debt instruments. Tokenholder claims are subject to qualified subordination and a pre-insolvency enforcement waiver, meaning:
Tokenholders rank below all unsubordinated creditors of the Issuer and above shareholders only.
Payments may be deferred, suspended, or cancelled if they would cause or worsen insolvency.
Claims may be enforceable only against the Issuer’s free assets.
Investors may suffer a partial or total loss of invested capital.
This risk profile may, in certain respects, exceed the risk of equity investments, because Tokenholders bear issuer credit risk without governance rights.
Final Notice
Tokens are high-risk financial instruments. You should only invest if you:
Understand subordinated credit risk,
Can bear a total loss of capital,
Have obtained independent legal, tax, and financial advice if needed.
If you do not accept these risks, you must not deal in the Tokens.
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