Risk Disclosures

1. Human Error in Fund Management

Although our smart contracts handle deposits, yield tracking, and withdrawals, investment decisions are ultimately made by our team. This human factor may lead to errors in judgment or execution, potentially affecting fund performance.

2. Protocol Risks

Funds are deployed into DeFi protocols on the Solana blockchain. These protocols may have vulnerabilities, exploits, or bugs in their smart contracts, which could lead to partial or total loss of the invested funds.

3. Non-directional Strategy Risks

Our strategies do not take directional bets on asset prices. However, events such as depegging or errors in oracle price feeds can trigger liquidation and negatively impact fund performance.

4. Bridged Token Risks

Some strategies involve bridged tokens, which rely on cross-chain bridges. These bridges may have security vulnerabilities that could result in significant losses if compromised.

5. Regulatory Risks

Cryptocurrency regulations are subject to change. Shifts in legal frameworks, varying by jurisdiction, could impose constraints or obligations on our operations that may adversely affect our strategies.

6. Risk of Theft and Cyber Attacks

Despite stringent security measures, the potential for theft or cyber attacks remains. Hacking, phishing, or other malicious activities could compromise digital wallets or other infrastructure, resulting in asset loss.

7. Mitigation Measures

Should financial losses occur, Elemental will draw on its Compound and Insurance Funds. While the Compound Fund is generally deployed alongside our usual yield strategies, the Insurance Fund is allocated to low-risk opportunities such as vanilla lending, staking, or their equivalents. If these reserves are insufficient to cover all losses, any available amounts will be distributed proportionally among affected users to ensure a fair resolution.

8. Additional Risks and User Acknowledgment

The risks outlined herein do not cover every possible risk associated with Elemental or the broader cryptocurrency markets. By depositing funds with us, you acknowledge and accept the inherent risks of digital asset investment, including the potential for total and irrecoverable loss of capital. You understand and agree that any reliance on our platform and services is undertaken at your sole risk and discretion.

9. Waiver of Claims and Limitation of Liability

By using Elemental’s platform, you confirm that you have read, understood, and accepted all risks described in this disclosure. You further agree to waive any right to legal action against Elemental, its officers, employees, and affiliates for any claims or losses arising from your participation, unless explicitly stipulated otherwise by applicable law. This waiver includes, but is not limited to, losses resulting from human error, protocol exploits, cyber attacks, or regulatory changes. Your recourse in any loss scenario is strictly limited to the mitigation measures described above.