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Risks
Risks involved while participating in INK Protocol.
INK Protocol is based on the UST stablecoin. Although UST has a mechanism to stabilize the price and it is widely known to be the least volatile stablecoin, UST price can be volatile from time to time.
Although small and rarely the case, there is a chance that our protocol is compromised and might affect the ability to withdraw from INK protocol either temporarily or permanently.
Things we do to prevent and mitigate risks:
- We take detailed and high diligence in evaluating 3rd party protocols.
- We constantly review and improve our smart contracts.
- We have 3rd party professional auditors audit our smart contract.
To use or interact with INK Protocol requires a Terra station wallet. If you permanently lose access to this wallet (either by forgetting the password or seed phrase), you will not be able to recover your funds.
Make sure you backup your wallet's seed phrase properly and NEVER share with anyone.
INK Protocol is based on 3rd party protocols to generate the yield for the prizes. There is a risk that the 3rd party may have edge behaviors.
For instance, Anchor may prevent withdrawals when Anchor's borrowing rate is too high, which in turn prevents your ability to withdraw from INK Protocol temporarily. You must wait until the borrowing rate goes down below the threshold.
Our randomization is based on deriving keccak256 hash of the following entropies:
- INK Protocol's team-submitted secret algorithm that is re-generated every round
- Terra's block timestamp
- Terra's block height
- LUNA-UST exchange rate
As pointed out by our smart contract auditor, the block producer may be able to influence the prize winner. We believe the chance is low and unlikely to be economically profitable (given Terra's block time, block timestamp validity, and the chance of being the block producer at the time of drawing). Therefore, we believe that the combination of the above entropy sources is sufficient for weekly prize drawings for our initial version.
We are working to improve this in future iterations, including replacing the above technique with an oracle's Verifiable Random Function (VRF).
Last modified 1yr ago