Using the protocol includes substantial risks of losing some or all of your funds. Epsylon core team and community have made every effort to ensure the security of funds.
Epsylon’s core products are the vaults. Each vault runs at least one strategy, and each strategy is exposed to at least one protocol. Epsylon’s vaults are exposed are lending protocols, AMMs, and protocols that enable leverage.
The risks linked to the Protocol are the following:
Market: Low demand for borrowing in lending protocols and lack of liquidity, volatility of token farmed, and impermanent loss in AMMs.
As a general market risk, we have the non-maintenance of the Stablecoin peg, which could occur in periods of high volatility.
Operational: Delays or inability to withdraw assets from the lending protocol in an emergency and operational risks of managing debt positions.
Delays or inability to withdraw assets from the lending protocol or the AMM in an emergency.
Incorrect price feed could cause the collateral to go to such a value that a loan is liquidated.
Protocol Risk: Epsylon finance Protocol uses several other protocols. Therefore, there is the risk that these other integrated protocols can fail.
To mitigate this risk the protocol is only integrated with highly reputable and well-secured protocols.
Smart Contract Risk: This type of risk is specific to Epsylon. The risk is that there could be some sort of bug or exploit in the smart contracts that run Epsylon Protocol. This is a risk within any Protocol on Fantom.
Wallet Loss Risk: This risk doesn’t have anything to do with Epsylon but we wanted to mention it. Using Epsylon requires you to use a Fantom wallet that supports Fantom apps. If you permanently lose access to this wallet, you will not be able to recover your funds.
Governance: Admin key holders (or token holders) change the protocol adversely. There have been cases in which malicious developers end up running away with the liquidity provided by the users. If you do not know the developers, risks are way higher. Participants should always check that the Protocol they are interacting with is lead by a team that they believe in.
As you can see, there are two sides to the coin. On one hand, the DeFi Ecosystem is not risk-free, but on the other hand, the return rates are higher compared to traditional methods.
Yield Farming will become an efficient market bringing many yield generation opportunities. Yet, keep in mind all potential risks to avoid problems.