Risks and limits
A funded cap limits what a contract can pay. It does not make the contract low risk. Either participant can receive zero and lose their full contribution.
Full loss and no early exit
Section titled “Full loss and no early exit”The Contract buyer can lose the whole Contract price. The Contract seller can lose the whole value contributed through conversion. Once filled, a position cannot be closed, transferred, or sold early under the selected rules.
There are no price-driven margin top-ups or liquidations. A large price move can still allocate all of a fill’s funds to the buyer and leave the seller with nothing.
A target is not a promised receipt
Section titled “A target is not a promised receipt”In a contract fill, the target is the total funded amount. The seller only receives all of it when the settlement rule gives the buyer zero. In other outcomes, the seller receives less.
A direct swap is different: when actual conversion meets the target, the issuer receives all output and has no later settlement claim.
Price and timing risk
Section titled “Price and timing risk”Settlement uses tomorrow’s full-day average. It does not use the next tick, a momentary high or low, or the price when you ask to withdraw.
The payout asset also has its own price risk. A BTC result can change in USDC value. USDC and any chosen BTC token representation have risks of their own. The production token setup is not yet selected and verified.
Order and execution risk
Section titled “Order and execution risk”A limit order may never find a match. It can wait while its direction is ineligible and then expire. A buyer’s resting bid can fill at a q different from an earlier estimate.
The required buyer payment on a target order shrinks as conversion gets closer to the target. There is no minimum Contract price beyond being positive. A buyer may wait for a very small payment while still receiving valuable exposure. This is an accepted open design risk that needs further measurement.
Fixed-price limit orders have no separate conversion limit. Real conversion needs checks against price manipulation and unfavorable execution. The production swap route and related controls remain unfinished.
Data and settlement delays
Section titled “Data and settlement delays”Missing or invalid data can stop new contract fills or delay settlement. A lasting outage may keep funds locked longer than expected. The production recovery policy still needs to be completed; there is no selected discretionary replacement price.
Software and operating risk
Section titled “Software and operating risk”The financial contracts, token integrations, oracle, matching services, and recovery paths need end-to-end testing and security review. The planned rules do not by themselves prove that a deployed system enforces them.
No audit or real-money readiness is claimed by these docs.
Costs and economic testing
Section titled “Costs and economic testing”The selected initial testnet protocol fee is zero. This does not remove gas, conversion costs, or other costs. Production fee rates and charging rules are not set.
The initial Split rate settings and direction band need further testing. Worked examples explain arithmetic; they do not show a fair Contract price or expected return. Historical simulations are not evidence of future performance or demand.
See the current status before treating any described flow as available.