# Risk Disclosures

#### 1. **Human Error in Fund Management**

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

#### **2.** Market Volatility and Liquidation Risks

Elemental seeks to generate yield in a disciplined and sustainable manner; however, certain strategies are subject to defined liquidation thresholds. Positions are actively monitored and structured to withstand typical market fluctuations, but extreme volatility may exceed these parameters. In such scenarios, rapid and significant price movements can trigger liquidations, resulting in realised losses.

#### **3. Depegging and Oracle Risks**

Elemental’s strategies are designed to be non-directional and do not rely on predicting asset price movements for returns. However, they remain exposed to price dynamics through collateral requirements and liquidation thresholds. Positions are actively managed to maintain prudent buffers, but events such as depegging or errors in oracle price feeds can distort valuations and trigger liquidations, potentially impacting fund performance.

#### **4. 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. Elemental does not underwrite these risks, and any losses incurred will be reflected proportionately in user deposits.

#### **5. 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.

#### **6. 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.

#### **7. Risk of Theft and Cyber Attacks**

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

#### **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.