2.1 Liquidity Pool Risks

Liquidity in decentralized protocols can be withdrawn at any time by liquidity providers. This may result in:

• Sudden unavailability of lending capital
• Inability to execute loans or withdrawals
• Significant slippage when converting assets
• Temporary or permanent loss of access to deposited funds
• Increased borrowing costs due to reduced liquidity

2.2 Mass Liquidation Events

During periods of high market volatility, mass liquidation events may occur. You acknowledge that:

• Rapid price declines may trigger cascading liquidations across the Protocol
• Your collateral may be liquidated automatically and without prior notice
• Network congestion during high-volatility periods may prevent you from adding collateral or repaying loans in time
• Liquidation prices may be significantly unfavorable due to market conditions
• You may lose your entire collateral position during a mass liquidation event
• Oracle price feeds may experience delays or inaccuracies during extreme market conditions

2.3 Smart Contract Risks

The Protocol operates through smart contracts deployed on the Cardano blockchain. These contracts:

• May contain bugs, vulnerabilities, or errors despite security audits
• Are immutable once deployed and cannot be modified to recover lost funds
• May interact with other protocols in unexpected ways
• Could be exploited by malicious actors, resulting in loss of funds
• May cease to function if the underlying blockchain experiences issues

2.4 Oracle and Price Feed Risks

The Protocol relies on external price oracles to determine asset values. Oracle risks include:

• Price manipulation attacks that could trigger unfair liquidations
• Delayed price updates during periods of high volatility
• Oracle failures or downtime affecting Protocol operations
• Inaccurate NFT floor price estimations
• Discrepancies between oracle prices and actual market prices

2.5 Market and Volatility Risks

Digital assets are highly volatile. You acknowledge:

• NFT and cryptocurrency values can fluctuate dramatically in short periods
• Historical performance does not guarantee future results
• Market conditions may change rapidly and without warning
• You may lose some or all of your invested capital
• There is no guarantee of liquidity for any asset at any time

2.6 Regulatory and Legal Risks

The regulatory landscape for DeFi is evolving:

• Laws and regulations may change, potentially affecting Protocol operations
• Certain jurisdictions may prohibit or restrict access to the Protocol
• You are solely responsible for compliance with applicable laws in your jurisdiction
• Tax treatment of DeFi transactions may be unclear or unfavorable

3.1 No Guarantees or Insurance

The Protocol is provided on an "AS IS" and "AS AVAILABLE" basis. We make no representations or warranties of any kind, express or implied:

• Funds deposited in the Protocol are NOT insured by any government agency (including but not limited to FDIC, SIPC, or equivalent)
• There is no guarantee of returns, principal protection, or asset recovery
• We do not guarantee continuous, uninterrupted access to the Protocol
• We are not responsible for losses due to smart contract failures, hacks, or exploits
• We do not guarantee the accuracy of any information displayed on the Protocol

3.2 User Responsibilities

By using the Protocol, you represent and warrant that:

• You are of legal age in your jurisdiction and have the legal capacity to enter into these Terms
• You are solely responsible for securing your wallet credentials and private keys
• You understand and accept the risks of using decentralized protocols
• You will not use the Protocol for any illegal activities
• You will conduct your own research and due diligence before using the Protocol
• You will monitor your positions and maintain adequate collateral levels

3.3 Liquidation Terms

You understand and agree to the following liquidation terms:

• Loans may be liquidated automatically when collateral value falls below required thresholds
• Liquidations are executed by smart contracts without human intervention
• You will receive no advance notice of liquidation beyond on-chain monitoring
• Liquidated collateral may be sold at prices below market value
• All liquidations are final and irreversible
• Network congestion may prevent you from preventing liquidation even if you attempt to add collateral
• You are solely responsible for monitoring your loan health and collateral ratios

3.4 Limitation of Liability

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW:

• Levvy, its affiliates, and contributors shall not be liable for any direct, indirect, incidental, special, consequential, or exemplary damages
• This includes damages for loss of profits, goodwill, data, digital assets, or other intangible losses
• We are not liable for losses arising from smart contract vulnerabilities, hacks, exploits, or failures
• We are not liable for losses due to network congestion, oracle failures, or third-party service disruptions