Risk Disclosures

Your funds are held by smart contracts. If a contract contains a vulnerability, an attacker may be able to drain it, and losses on public blockchains are generally irreversible — there is no chargeback and no deposit insurance.

No DefiLords contract has been audited by an independent third party. Unaudited code carries a higher probability of undiscovered vulnerabilities than audited code. See Security for the full status.

Borrowing against collateral creates a position that can be liquidated. If the value of your collateral falls, or the value of your debt rises, your position can be closed automatically and your collateral sold to repay the loan — typically at a penalty, and without prior notice.

Liquidation can happen quickly during volatile markets, and network congestion may prevent you from adding collateral or repaying in time. Borrowing at close to the maximum permitted ratio leaves very little margin before liquidation.

Crypto asset values fluctuate significantly and can fall sharply over short periods. Yield rates are variable, not fixed, and can drop to zero. Any rate or APY figure shown in the interface is a current or historical observation, never a guarantee of future return.

Collateral valuation and liquidation depend on price data from an oracle. If that data is delayed, manipulated, or incorrect, positions may be liquidated when they should not be, or loans may be issued against collateral worth less than reported. Oracle failure is a recurring cause of loss across DeFi generally, not a hypothetical one.

Withdrawal depends on sufficient liquidity being available in the pool. If utilisation is high — that is, most supplied assets are currently borrowed — withdrawals may be delayed until borrowers repay or new liquidity arrives. Under stressed conditions this delay can be extended.

Positions involving stablecoins carry the risk that the stablecoin loses its peg. A depeg can cause losses on supplied assets and can trigger liquidations on positions collateralised by the affected asset, even where the underlying strategy is otherwise sound.

Where the protocol routes capital into external venues or integrates third-party contracts, a failure or exploit in those systems can cause loss even if DefiLords’ own contracts behave correctly. Risk is inherited from every integration in the path.

Privileged roles may exist that can pause contracts, change parameters, or upgrade logic. If such a key is compromised or misused, funds can be placed at risk regardless of the soundness of the underlying code. The current scope of these controls is documented on the Security page.

The regulatory treatment of DeFi lending varies by jurisdiction and continues to change. Future regulation, or a determination that the protocol may not be offered in your jurisdiction, could restrict your ability to access the interface or your positions.

The protocol is provided without warranty of any kind. There is no guarantee that it will operate without interruption, that yields will be achieved, or that funds will be recoverable in the event of an exploit. There is no deposit protection scheme, no insurer of last resort, and no mechanism to reverse a completed on-chain transaction.

The full legal terms governing your use of the protocol are set out in the Terms of Service.