When interacting with the JUICE Protocol, it's essential to comprehend the various risks involved. Here's a breakdown of the potential risks and considerations:

Protocol Technical Disclosure

Oracle Risk

JUICE currently relies on RedStone and Api3 Price Feeds and Thruster on-chain prices as oracles. While these are widely used in the industry, it's crucial to recognize that oracles are a critical point of DeFi infrastructure. Incorrect data reporting or oracle malfunctions can lead to significant losses and disruptions in protocol operations.

Sandwich Attacks and MEV

Like any other EVM network, users of the JUICE protocol are susceptible to MEV attacks. Users should exercise caution when executing trades, as slippage and sandwich attacks may occur. Utilizing better RPCs can help mitigate these risks.

Hacks and Software Risks

Malfunctions in the protocol, security breaches, or exploitation of unintended functionalities can result in partial or complete loss of funds. Users should be aware of these risks and take necessary precautions.

Risks for Lenders

Liquidity Risk

Depending on the utilization ratio of pools, liquidity may not be immediately withdrawable. While this does not indicate insolvency, it may affect the availability of liquidity for lenders. JUICE can adjust parameters to manage such situations.

Bad Debt Risk

Despite automatic liquidation processes, there's a possibility that the liquidation amount may not cover the debt owed, leading to bad debt. In such cases, lenders may incur losses pro-rata.

Risks for Borrowers

Liquidation Risks

Borrowers face the risk of liquidation, potentially resulting in loss of borrowed funds and deposited collateral. Understanding liquidation mechanisms is crucial for borrowers.

External Protocol Risks

Borrowers that make deposits into Strategy Vaults are exposed the external protocol the vault uses. Borrowers understand that other protocols carry their own risks and Borrowers accept the risks that come from interacting with these external protocol by way of JUICE strategy vaults.

General Risks

JUICE operations may be subject to various laws and regulations in different jurisdictions. Changes in regulations or interpretations could impact the protocol's operations and compliance requirements.

Risk of Theft

Despite efforts to ensure security, theft of digital assets through hacks, cyber-attacks, or vulnerabilities in the protocol or related software remains a possibility. Users should exercise caution and implement security best practices.

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