Risks

Vanilla Finance is not an exchange and does not provide investment advice. The content of the application is for reference only and does not constitute any recommendation or offer for any product or service.

Vanilla Finance is a decentralized exchange (DEX) aggregator and does not directly engage in the exchange, development, creation, maintenance, or endorsement of any cryptocurrency.

Cryptocurrency prices can be highly volatile and unpredictable. Price data in the application may be inaccurate or delayed.

All transactions are conducted on the blockchain through the user's self-custodial wallet. Vanilla Finance charges platform fees that vary depending on network congestion and gas prices.

The following are some of the key risk factors.

Wallet Risk

Wallet services on Vanilla Finance are provided by third parties. Users are advised to verify the reliability of these services, as Vanilla Finance is not responsible for any risks related to third-party wallets. Please take necessary precautions to protect your private keys and funds.

Tokens Risk

Tokens especially Memecoins are highly volatile and speculative, carrying significant risk. Vanilla Finance bridges these tokens from other DEXs for trading, but their listing is community-driven and does not imply any endorsement from Vanilla Finance. Users should exercise caution, as memecoins can face large price fluctuations and liquidity issues

Market Liquidity Risk

As a relatively new protocol, there could be a potential risk of low liquidity, especially in the early stages. This can lead to significant price slippage for traders, negatively affecting the overall trading experience and possibly leading to substantial losses.

Oracle Manipulation Risk

Vanilla Finance relies on price oracles maintained by the validators to supply market data. If an oracle is compromised or manipulated for an extended period of time, the mark price could be effected and liquidations could occur before the price reverts to its fair value.

Squeeze risk

Squeeze risk is the risk that cascading short liquidations cause forced buying pressure, causing a rapid increase in price.

Utilization risk

Utilization risk is the risk that withdrawals are not available due to all the tokens being lent out.

Bad debt risk

Bad debt risk is the risk of some accounts being left with more debt than collateral after liquidation, which may result in a socialized loss.

Risk Mitigation

In Web3, users must always Do Your Own Research (DYOR). While Vanilla Finance implements various measures to enhance security, the decentralized nature of the space means that risks are inherent. We encourage users to stay informed, assess risks, and take appropriate precautions when engaging with any assets, tokens, or services. Always be cautious and ensure you understand the risks before making any transactions.