Risk

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Smart contract

• Audited, but residual bug risk exists
• Composability with external protocols

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Market

• Yield and correlation volatility
• Liquidation risk in leveraged positions

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Operational

• Network stability and infra dependencies
• Governance and regulatory changes

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Strategy‑specific

• Strategy Risk: DeFi is inherently risky. Events like smart contract exploits on underlying protocols (e.g., GMX, Dolomite) can expose part of your allocation to risk. Blend mitigates this in several ways:
  • Compartmentalized Exposure: Only a portion of your funds touches any single strategy. Your account type determines your risk tolerance, and Blend allocates capital accordingly.
  • Diversification: By spreading across multiple strategies and venues, Blend reduces the impact of any single point of failure.
  • Proactive Derisking: The system automatically unwinds positions when it detects adverse market conditions or increased risk, long before a liquidation becomes necessary.
• Delta‑neutral: correlation breakdown, LTV flux, flash loan capacity
• Cross‑chain: bridge security, gas volatility, liquidity fragmentation