Risk Disclosure

This Risk Disclosure document provides a summary of certain risks associated with using the Partial.ly platform and related services. This document is intended to help you understand potential risks before using our Services.

Important: This disclosure is not exhaustive and does not cover all possible risks. Additional risks may exist that are not described herein. This Risk Disclosure is incorporated into and forms part of our Terms of Service.

You should carefully consider whether using our Services is appropriate for you in light of your financial situation, risk tolerance, and investment objectives. If you do not understand any aspect of our Services or the risks involved, you should seek independent professional advice before using our platform.

Not FDIC or SIPC Insured: Digital assets are not legal tender and are not backed by any government. Unlike bank deposits, digital assets held through our Services are not insured by the Federal Deposit Insurance Corporation (FDIC), the Securities Investor Protection Corporation (SIPC), or any other governmental or private insurance program.

Potential Total Loss: You could lose some or all of your digital assets. The value of digital assets can fluctuate significantly and may decline to zero. There is no guarantee that you will be able to recover any value from your digital assets.

No Principal Protection: We do not guarantee the return of your principal or any specific rate of return. Any yields, interest, or rewards displayed are estimates and are not guaranteed.

Price Volatility: Digital asset markets are highly volatile. Prices can increase or decrease significantly in very short periods of time. The value of your holdings may change rapidly and unpredictably, and you may experience significant gains or losses.

Liquidity Risk: Markets for certain digital assets may be illiquid at times. You may not be able to sell or exchange your digital assets at a desired price or at all. During periods of market stress or low liquidity, you may experience difficulty exiting positions or may be forced to accept unfavorable prices.

24/7 Markets: Unlike traditional financial markets, digital asset markets operate continuously. Significant price movements can occur at any time, including when you are unable to actively monitor your positions.

Bugs and Vulnerabilities: Smart contracts are software programs that may contain bugs, errors, or security vulnerabilities. These defects may be exploited by malicious actors, potentially resulting in the loss of digital assets.

Admin Keys and Upgrades: Some smart contracts may have administrative functions that allow certain parties to modify the contract's behavior, pause operations, or upgrade the contract. These capabilities could be misused or compromised.

Composability Risks: Many DeFi protocols, including those accessible through our Services, are interconnected and depend on other smart contracts and protocols. A failure or exploit in one component can cascade and affect other protocols, potentially resulting in losses across multiple systems.

Audit Limitations: Even smart contracts that have been audited may contain undiscovered vulnerabilities. Audits do not guarantee the security or proper functioning of smart contracts.

Our Services interact with third-party protocols, including but not limited to Kamino Finance. These protocols carry their own risks:

• Parameter Changes: Protocol parameters such as loan-to-value (LTV) ratios, interest rates, collateral factors, and liquidation thresholds may change at any time, with or without notice. Such changes may adversely affect your positions.
• Governance Actions: Protocols may be subject to governance decisions made by token holders or other governance participants. These decisions may not align with your interests and could negatively impact your positions.
• Pauses and Degraded Performance: Protocols may be paused, experience degraded performance, or become unavailable due to technical issues, governance decisions, or other factors. During such periods, you may be unable to access your assets or manage your positions.
• Protocol Insolvency: Protocols may become insolvent or experience bad debt that cannot be fully recovered, potentially affecting all users of the protocol.

LTV Dynamics: When you borrow, your position has a loan-to-value (LTV) ratio that changes based on the value of your collateral and borrowed assets. If market conditions cause your LTV to exceed the liquidation threshold, your position becomes eligible for liquidation.

Liquidation Mechanics: Liquidation is the process by which third-party liquidators repay part or all of your loan and receive your collateral (often at a discount) in return. This process is automatic and does not require your consent. You may lose a significant portion of your collateral, including liquidation penalties.

No Guaranteed Prevention: There is no guarantee that you will be able to prevent liquidation, even if you are actively monitoring your position. Network congestion, transaction failures, or rapid price movements may prevent you from adding collateral or repaying your loan in time.

Alerts Not Guaranteed: We may provide optional alerts or notifications regarding your positions, but these alerts are not guaranteed. Alerts may be delayed, inaccurate, or fail to be delivered due to technical issues, network problems, or other factors beyond our control.

User Responsibility: It is your sole responsibility to monitor your positions and take appropriate action to manage your risk. You should not rely exclusively on alerts or notifications from our platform to manage your positions.

Monitoring Tools: Any monitoring tools, dashboards, or analytics provided through our Services are for informational purposes only. We do not guarantee their accuracy, completeness, or timeliness.

Oracle Dependence: DeFi protocols rely on oracles to provide price data. These oracles are external systems that may fail, provide inaccurate data, or be manipulated.

Price Feed Failures: Oracle price feeds may experience outages, delays, or errors. During such events, protocol functions that depend on accurate pricing may behave unexpectedly, potentially resulting in unintended liquidations or other adverse outcomes.

Price Manipulation: Oracles may be subject to manipulation attacks, where malicious actors attempt to artificially influence reported prices. Such attacks can trigger improper liquidations or enable exploits.

Price Discrepancies: Oracle prices may differ from prices on exchanges or other trading venues. These discrepancies can result in unexpected outcomes when executing transactions or managing positions.

Depeg Risk: Stablecoins are designed to maintain a stable value relative to a reference asset (typically USD), but they may "depeg" and trade significantly above or below their intended value. Depegs can occur suddenly and without warning.

Issuer and Custodian Risk: Many stablecoins depend on centralized issuers or custodians to maintain reserves backing the stablecoin. These entities may become insolvent, be subject to regulatory action, or fail to maintain adequate reserves.

Reserve Risk: The assets backing stablecoins may not be fully collateralized, may be invested in risky assets, or may not be readily accessible. Reserve compositions may change over time.

Freeze and Blacklist Risk: Some stablecoins (including USDC) include functionality that allows the issuer to freeze or blacklist addresses. If your address is frozen or blacklisted, you may lose access to those assets.

Network Congestion: Blockchain networks may experience periods of high congestion, during which transactions may be delayed or fail. During congestion, transaction fees may spike significantly.

Failed Transactions: Transactions may fail for various reasons, including insufficient fees, network issues, or smart contract errors. Failed transactions may still incur fees.

Reorganizations and Forks: Blockchain networks may undergo reorganizations or forks that can affect the finality of transactions. Previously confirmed transactions may be reversed or altered.

Network Upgrades: Blockchain networks may undergo upgrades that could temporarily disrupt services, change protocol behavior, or introduce new risks.

Our Services integrate with third-party providers. Each provider carries specific risks:

Multiple Fee Layers: When using our Services, you may incur fees from multiple sources, including:

• Network/blockchain transaction fees (gas fees)
• Protocol fees charged by underlying DeFi protocols
• Partner and third-party provider fees
• Partial.ly platform fees (see our Fee Schedule)

Slippage and Price Impact: When executing swaps or other trades, the actual execution price may differ from the quoted price due to slippage. Large trades relative to available liquidity may experience significant price impact.

Returns May Be Reduced: Fees and transaction costs may reduce or eliminate any returns you earn from using our Services. In some cases, fees may exceed your returns, resulting in a net loss.

Evolving Regulations: The regulatory environment for digital assets and DeFi is evolving rapidly. New laws, regulations, or enforcement actions may affect the availability, functionality, or legality of our Services or the digital assets accessible through our platform.

Jurisdictional Restrictions: Certain features or services may not be available in all jurisdictions. We may be required to restrict or discontinue services in certain locations based on regulatory requirements.

Compliance Actions: We or our partners may be required to take compliance actions (such as freezing assets, blocking transactions, or reporting information to authorities) that may adversely affect your use of the Services.

Taxable Events: Your use of our Services may result in taxable events, including but not limited to: buying, selling, or exchanging digital assets; earning yields or rewards; borrowing and liquidation events; and receiving airdrops or other distributions.

User Responsibility: You are solely responsible for determining your tax obligations and for paying any taxes owed. We do not provide tax advice and recommend that you consult with a qualified tax professional.

Recordkeeping: You are responsible for maintaining records of your transactions for tax purposes. While we may provide transaction history, it may not include all information necessary for tax reporting.

Variable APY: Any annual percentage yield (APY), interest rate, or return displayed through our Services is variable and may change at any time. Displayed rates are estimates based on current conditions and are not guaranteed.

No Performance Guarantees: We do not guarantee any specific level of performance, returns, or yields. Past performance is not indicative of future results.

Yield Sources: Yields may come from various sources including protocol incentives, lending interest, liquidity provision, or other mechanisms. These sources may change or be discontinued at any time.