Risk Disclosures

Human Error in Fund Management

At Elemental, while our smart contracts facilitate deposits, yield tracking, and withdrawals, the actual investment decisions are made manually by our team. This human element introduces the possibility of error in judgment or execution, which could impact fund performance.

Protocol Risks

The protocols into which we deploy funds carry inherent risks. These may include vulnerabilities to exploits or failures due to bugs in smart contract code. Such incidents could lead to a partial or total loss of the funds invested in these protocols.

Non-directional Strategy Risks

Our investment strategies do not take directional bets on asset prices. However, they are still susceptible to risks such as liquidation events caused by depegging or inaccuracies in price feeds from oracles. Such issues can adversely affect the fund's performance.

Bridged Token Risks

Some of our strategies involve tokens that are used across different blockchains via bridges. These bridged tokens are exposed to risks associated with bridge security, including potential vulnerabilities to hacks or failures, which can lead to significant losses.

Regulatory Risks

The regulatory environment for cryptocurrencies is still evolving. Changes in regulations or a shift in the legal stance towards cryptocurrencies in various jurisdictions can affect our operations and could impose limitations or obligations that adversely impact our strategies.

Risk of Theft and Cyber Attacks

Despite stringent security measures, the potential for theft and cyber attacks remains. This includes, but is not limited to, hacking, phishing, and other malicious activities that could compromise our digital wallets or other critical infrastructure.

Mitigation Measures

In the event of financial losses, Elemental will draw down on our Compound and Insurance Funds. While the Compound Fund is normally deployed to farm yields, the Insurance Fund holds idle funds to minimize risk. Should the total amount in these funds be insufficient to cover all losses, the available funds will be distributed proportionally among all impacted users to ensure equitable resolution.

Additional Risks and User Acknowledgment

Please note that the risks listed above do not encompass all potential risks associated with investing in Elemental or the broader cryptocurrency markets. By choosing to deposit funds with us, you acknowledge and accept that there are inherent risks involved in digital asset investment, including the possibility that your money may be lost and may be irrecoverable. As an investor, you must understand and accept these risks before engaging with our platform.