Market risk
Digital assets are volatile. A vault holding ETH or BTC will fall when those assets fall, and a drawdown cap limits losses but does not prevent them.
Smart contract risk
Audits reduce risk, they do not remove it. A bug in a Loaf contract, or in a protocol a vault routes through, can cause partial or total loss.
Strategy risk
A basis trade can invert. A delta-neutral book can be neutral in theory and directional in a liquidation cascade. Curators can be wrong within their mandate.
Counterparty and RWA risk
Tokenised treasuries depend on an issuer, a custodian and a redemption process. Failure at any layer can break the peg even if the underlying bill is fine.
Liquidity risk
Withdrawals settle at NAV. In stressed markets, unwinding positions to meet withdrawals can realise worse prices than the last published NAV.
Oracle and network risk
Stale or manipulated prices, chain reorganisations and congestion can delay or
misprice execution. Trades revert past oracleMaxAge, which is a safety
measure, not a profit guarantee.
Regulatory risk
Rules for digital assets change. A product available to you today may be restricted in your jurisdiction tomorrow.
Operational risk
You control your keys. Phishing, a compromised device or a mistaken signature can drain a wallet, and no part of that is reversible by us.