Risks and Terms & Conditions

Protocol Risks: Key Considerations for Users

Oracle Risk

At its current stage, Macaron relies on XXX Price Feeds. While these are industry-standard services, it's important to recognize that oracles play a critical role in DeFi infrastructure. If an oracle provides faulty or manipulated data, it could lead to unexpected liquidations or malfunctioning protocol operations, potentially causing bad debt and loss of user funds.

Liquidations and Black-Swan Events

Liquidations on Macaron are not controlled by the protocol or its members; they are managed by third-party liquidators, which are open for anyone to participate in. However, there may be instances where liquidators fail to perform as expected, even with economic incentives in place. This could lead to under-collateralization and potential loss of capital for liquidity providers (LPs).

Risks Associated with Allowed Tokens and Contract Lists

The AllowedList determines where Macaron users can deploy their leveraged funds. Incorrect liquidation thresholds or vulnerabilities in these assets could lead to insolvency in the liquidity provider (LP) pools.

Inability to Withdraw Capital Due to Full Utilization of LP Pool

Even if the protocol remains over-collateralized and stable, if the entire LP pool is fully utilized, LPs may be temporarily unable to withdraw their capital. This situation is common in DeFi platforms and is considered standard practice.

Wallet Connection and Transaction Signing Challenges

Users may face difficulties with wallet connections or signing transactions, which can hinder interaction with the Macaron protocol. These obstacles should be considered when using the platform.

Hacks and Software Vulnerabilities

Exploits that misuse the protocol, unintended malfunctions, or other security breaches can disrupt the system's design. Such incidents could result in a partial or total loss of funds, and users should be aware of and accept these potential risks.