> For the complete documentation index, see [llms.txt](https://docs.uwu.cash/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.uwu.cash/resources/risk-disclosure.md).

# Risk Disclosure

Like all smart contract-based protocols, UWU Protocol carries a variety of risks that should be understood and carefully considered before use.

In the event of an unidentified exploit or hack, users may suffer a complete loss of funds. There are no refunds available for losses resulting from the use of UWU Protocol. Users participate in UWU Protocol at their own risk and should perform their own research before engaging with the protocol.

## **Smart Contracts**

UWU Protocol uses smart contracts to function. As with any code, there is always a possibility of undiscovered bugs or vulnerabilities.

## **Liquidations**

In the event that a Vault fails to maintain a minimum collateral ratio of 150%, the Vault is liquidated (closed). During a liquidation, liquidators are able to acquire the collateral held in a Vault by repaying the Vault's debt. This results in a loss of funds for the Vault owner.

## Peg Stability

The price of UWU Cash (UWU) should float around $1.00, but there is always the possibility of UWU de-pegging. UWU Protocol only relies on liquidations and arbitrage to maintain peg stability. Since the protocol lacks governance, redemption modules, and other mechanisms to stabilize UWU's peg, the price on the open market can deviate.

## **Oracle Provider**

UWU Protocol relies on a trust-minimized oracle until a decentralized option is available on Stacks. The oracle parameter is the only changeable parameter that affects protocol functionality. Currently, core contributors have access to change the parameter. Once updated, the parameter is permanently frozen and unchangeable.

## **Audits**

At this time, UWU Protocol has not undergone a formal audit. A formal audit is planned in the future to improve the security and transparency of the protocol.


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