SECURITY & RISK
Audits and Testing
Harmonix has undergone rigorous audits by Verichains to ensure its smart contracts are secure and robust against vulnerabilities.
Risk Management
Impermanent Loss Protection: Delta-neutral strategies minimize exposure to price volatility.
Liquidation Avoidance: Strategies are designed to operate within safe parameters, reducing the risk of liquidation.
Governance Controls: Decentralized decision-making ensures protocol safety and transparency.
Trading Fee Impact Mitigation: Fixed trading fees (0.0366%) incurred during execution are accounted for, ensuring strategies remain efficient despite minor reductions in initial deposit value.
Risk Matrix
Risk
Probability
Impact
Mitigation Strategy
Smart Contract Vulnerabilities
Low
High
Conduct thorough smart contract audits, integrate only well-audited protocols (AAVE, GMX), audited, using real-time audit from Blocksec's Phalcon, Community bugs rewards, $1m in insurance fund.
Oracle Manipulation
Low
Medium
Use highly secure and decentralized oracles (e.g., Chainlink); monitor oracle data feeds for anomalies.
Market Volatility
Medium
Low
Maintain delta-neutral positioning; establish automated monitoring of health factor and leverage levels; use auto-rebalancing tools if available.
Funding Rate Variability
Low
Medium
Diversify across funding rate opportunities where possible; set limits on dependency on short funding fees to avoid over-reliance on one revenue source.
Counterparty Risk with Third-Party Protocols
Low
Medium
Use only well-established protocols with a strong track record (AAVE, GMX); monitor protocol updates, governance proposals, and partnership developments for any adverse impacts.
Collateralization and Liquidation Risks
Low
Medium
Set a minimum health factor threshold (e.g., 1.5); implement automatic system to avoid liquidation.
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