Strategy and market risks
These risks come from the curator’s strategy and from the assets the vault lends against or holds.Strategy losses
A strategy can underperform or lose money, even within the limits of the smart contract. The curator can also change the vault’s fees or withdrawal waiting period within those limits. See Curators.
Borrower defaults
Offerbook loans have a fixed term and no price-based liquidation. If a borrower does not repay, the vault claims the collateral and may sell it for less than the loan. All depositors share the loss through the share price.
Leverage in looping vaults
Looping vaults borrow to increase their exposure to an asset, so losses are amplified as well as gains, and the loans keep costing interest. On Jupiter Lend, the position can be liquidated if the collateral loses too much value. See Looping vaults.
Depegs and frozen assets
Stablecoins and yield-bearing tokens backed by real-world assets can lose their peg or their value. Their issuers may be able to freeze, pause or redeem them.
Vaults price their assets with oracles. If a price feed goes stale or a stablecoin depegs, deposits and withdrawals can be blocked until the feed recovers.
Withdrawal risks
You cannot always get your USDC back immediately:
See Withdraw for the full flow.
Pricing and technical risks
Estimated share price
Running loans have no market price: the curator’s pricing key posts their value, within limits set by the smart contract. A default or a revaluation can lower the share price at once. See Estimated share price.
Smart contracts
A vault relies on the vault program and on every protocol its strategy uses, such as Offerbook and Jupiter Lend. A bug or exploit in any of them can cause losses. The vault program can be upgraded to support new protocols.
Lost vault shares
Your vault shares are your claim on the vault. Burning them, for example with a wallet cleanup tool, or sending them away gives up that claim.