The risks mentioned below are likely to be encountered when participating in any DeFi/LSDFi protocol. These risks are not unique to STFIL.

Potential Risks to Stakers

Timing of Asset Return:

  • ⚠️
    Risk: in the event of a run on the pool due to high utilization, stakers may experience a delay in receiving their staked assets back. Please note that storage providers can borrow funds indefinitely without a fixed repayment deadline.
  • ℹ️
    Mitigation: we use a two-tiered slope interest rate to optimize for utilization rate. The range for utilization rate is set at [80%, 90%]. Beyond this optimal utilization range, interest rates sharply increase to incentivize more collateral and borrowers to repay outstanding loans. This keeps the optimization pool at a flexible level between 80% and 90%."

Smart Contract Risks

  • ⚠️
    Risk: Although third-party firms have conducted audits on our smart contracts, it is still possible for them to contain vulnerabilities in theory.
  • ℹ️
    • Having smart contracts audited by multiple professional third-party firms decreases the chance of vulnerabilities.
    • We also run a bug bounty program to provide incentives for people to look for vulnerabilities in our live code as an extra layer to filter out any potential issues.
While we do our best to eliminate all possible risks, the DeFi industry is inherently unpredictable and can experience unforeseen events (known as "black swans"). We strongly advise against investing your life savings or risk assets you can’t afford to lose.Try to be as careful with your funds as we are with our code. 😊
Last modified 3mo ago