Risk Disclosure

Enclave Money is dedicated to providing a secure and efficient platform for users to earn yield on their stablecoins. However, as with any decentralized finance (DeFi) platform, there are inherent risks associated with using Enclave Money. It is important for users to understand these risks before participating.

Smart Contract Risk

• Enclave Contracts: While Enclave's smart contracts are designed with security in mind and undergo rigorous audits, there is always a risk of vulnerabilities or bugs. These could potentially be exploited, leading to loss of funds or disruption of services.

• Yield Sources: The DeFi protocols integrated with Enclave Money, such as Aave, Compound, Curve, Morpho Blue, and Ethena.fi, also rely on smart contracts. Any vulnerabilities or exploits in these protocols' contracts can impact the yield generation and safety of user funds.

Network Congestion Risk

High transaction volumes on blockchain networks can lead to congestion, resulting in delayed transactions and higher fees. This can affect the efficiency and cost-effectiveness of Enclave's operations, including deposits, withdrawals, and rebalancing activities.

51% Attack

A 51% attack occurs when a single entity or group gains control of more than 50% of the blockchain network's hashing power or stake. This control can be used to manipulate the blockchain, including reversing transactions, double-spending, and preventing new transactions from being confirmed.

• Impact on Enclave: If a 51% attack occurs on any of the networks supported by Enclave Money, it could lead to disruptions in operations, loss of funds, or incorrect updates to the state of the fund pool reserves and user balances.

Chain Rollback

A chain rollback is an event where a blockchain network is reverted to a previous state, effectively undoing transactions that occurred after the rollback point. This can happen due to software bugs, consensus issues, or malicious attacks.

• Impact on Enclave: Chain rollbacks can cause significant disruptions, including the reversal of legitimate transactions and incorrect fund pool reserve states. Users may experience discrepancies in their EUSD balances, and the integrity of the yield generation process could be compromised.

Mitigation Measures

Enclave Money takes several measures to mitigate these risks, including:

• Security Audits: Regular and thorough security audits of Enclave's smart contracts and protocols.

• Diversification: Integrating with multiple yield sources to spread risk and reduce dependence on any single protocol.

• Monitoring: Continuous monitoring of network conditions and security developments to respond quickly to potential threats.

• Community and Governance: Engaging with the DeFi community and participating in governance processes of integrated protocols to stay informed and influence security practices.