# Platform Risks

While we aim to create a secure trading environment, some risks exist. We believe in transparency - please review the key risks:

## Liquidity Risks

* LPs take on asset price exposure.
* LPs absorb counterparty risk from traders.
* Unbalanced asset exposure may impact LP pricing.
* Insufficient liquidity can affect trade execution.

We've implemented measures to mitigate external price manipulation. But it remains a potential risk.

## Liquidation Risks

Trades will liquidate if:

* Collateral falls below $5 margin fee.
* Position drops below 1% maintenance margin.

Liquidations are automatically handled by Chainlink Keepers.

## Smart Contract Risks

* Decentralized apps have inherent vulnerabilities.
* The RWAX DAO oversees platform security.
* We prioritize audits to mitigate risks.

While we aim to manage risks diligently, it's essential users understand them before trading. Our goal is maintaining the highest level of platform stability and security.

Please let us know if any risks require further explanation. We're here to help you trade confidently.


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