Protocol Risks

Using decentralized finance protocols like Evaa offers benefits like earning interest and getting loans without middlemen. However, these activities also come with risks that require careful consideration.

By being aware of and managing these risks, you can make more informed decisions while using the Evaa Protocol.

100% Utilization Risk

If demand for a loaned asset is high, you might not be able to withdraw your supplied assets immediately. To manage this, diversify your investments and keep an eye on utilization rates.

Asset Risk The value of assets can be highly volatile, which may not only lead to sudden losses or forced liquidation if collateral values drop significantly but could also result in a total loss of the entire protocol if liquidation is delayed due to compromised assets. Centralized assets introduce additional risks where control by a single entity could compromise the security or availability of the asset, amplifying the potential impact on the entire protocol.

Oracle Risk

Oracles supply important price data to smart contracts but can be vulnerable to manipulation or hacks, potentially leading to incorrect liquidations or trades. Evaa mitigates this risk by using an on-demand oracle system with decentralized price storage, ensuring data is gathered from multiple sources and securely stored to prevent manipulation and enhance accuracy.

Smart Contract Risk

Smart contracts on the Evaa Protocol have been audited by a top-tier auditing firm Quantstamp, which greatly enhances their security. However, as with any audit, there's always a possibility that some vulnerabilities may go undetected.