Risks & Considerations

Participating in Levrex Finance involves various risks. Users should be aware of these before supplying capital or taking leveraged positions.

1. Smart Contract Risk

Levrex is powered by smart contracts, which may contain bugs or vulnerabilities. While audits and security reviews help minimize these risks, no system is completely immune to failure or exploitation.

2. Liquidation Risk

Borrowers using leverage must monitor their Health Factor closely. A sharp drop in collateral value or an increase in borrowed token demand can lead to liquidation, where part or all of your collateral may be sold.

3. Market Risk

DeFi yields and token prices are subject to volatility. Market downturns can reduce returns or lead to impermanent loss, particularly for strategies involving liquidity pools or farming positions.

4. Protocol Dependency

Levrex interacts with external protocols like Sushiswap, YearnFi, and Morpho Labs. Changes in their functionality, incentives, or reliability could impact Levrex’s performance.

5. Regulatory Risk

As DeFi continues to evolve, regulatory frameworks may shift. Users should be aware of any legal obligations applicable in their jurisdiction.

6. Peg Stability

AUSD must maintain its peg for the platform to function effectively. Depegging could introduce instability in lending and borrowing operations.

Best Practices for Users

• Start with small positions

• Avoid using max leverage

• Regularly monitor Health Factor and protocol updates

• Stay informed through official Levrex communication channels

DeFi offers powerful tools, but users should always conduct their own research and exercise risk management.