> For the complete documentation index, see [llms.txt](https://docs.native.org/native-dev/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.native.org/native-dev/concepts/risks.md). # Risks ## Smart contract risk Although our smart contracts have undergone audits by third-party firms, it is theoretically possible for vulnerabilities to exist. Furthermore, integrated third-party projects, including utilities and listed token projects, may also present risks associated with smart contracts. Mitigation: * Engaging multiple professional third-party firms to audit smart contracts significantly mitigates the risk of vulnerabilities. Audit reports are available [here](/native-dev/resources/audits.md). * Additionally, we implement a bug bounty program to incentivize individuals to identify vulnerabilities in our live code, serving as an additional measure to filter out potential issues. * We meticulously evaluate any new tokens or utilities that we choose to list and utilize, collaborating exclusively with those that have undergone auditing and demonstrated a proven track record of robust security. ## Pool liquidity market risk Price volatility is a risk for Native Pool tokens. Market fluctuations can lead to the following outcomes: **USD Value Loss of Deposited Assets:** The value of your deposited assets may decline in terms of USD due to price drops. **Risk of Bad Debt:** In highly volatile or extreme market conditions, the liquidation mechanisms may struggle to execute swiftly. This lag can occur due to rapidly falling token prices or a congested blockchain network, resulting in uncollateralized positions and potential bad debt within the system. Mitigation: * Several automated risk monitoring mechanisms have been implemented throughout the system to maintain operational integrity. * Conservative collateralization thresholds have been established to provide a sufficient buffer to counteract market volatility. * Additionally, high-frequency, dynamic adjustments to the lending parameters have been instituted to ensure the system can promptly respond to any changes in market conditions. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.native.org/native-dev/concepts/risks.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.