Strobe Protocol
  • Introduction
  • Terminology
  • Products
  • Money market
    • Rationale
    • User guide
    • Architecture
      • Deposit and repayment
      • Withdrawal and borrowing
      • Liquidation
      • EVM Sidechain lending internals
    • Interest rate strategies
      • Interest rate strategy 1
    • Asset parameters
      • Definitions
      • Values
    • Overcollateralization and collateralization ratio
    • Health factor and liquidation
    • Oracle
    • Axelar
      • General message passing
      • Failure conditions and solutions
    • Risks
    • FAQ
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On this page
  • Smart contract risk
  • Liquidation risk
  • Market risk
  • Platform risk
  • Price oracle risk
  • Axelar asset risk
  1. Money market

Risks

PreviousFailure conditions and solutionsNextFAQ

Last updated 1 month ago

Smart contract risk

Strobe Protocol is doing its best to write secure and safe smart contracts. It will be going under audits and thorough tests, and reports will be posted as soon as they are available. However, in case where someone takes advantage of an exploit that was not uncovered beforehand, it is possible that the funds may be affected.

Liquidation risk

This risk only applies to borrowers. When the of borrowers falls below 1, a liquidation may happen to seize the collateral of the borrower at a discount in exchange for the repayment from the liquidator. When this happens, the borrower will lose more collaterals than his debt that was repaid for.

Market risk

Market risk refers to the risk of losses due to changes in market conditions that affect the value of assets held within the protocol. This can be due to fluctuations in interest rates, asset prices, or overall market volatility.

Platform risk

Platform risk involves the potential risk associated with the malfunction or security vulnerabilities of the underlying technology or platform on which the DeFi protocol is built. This includes risks from blockchain networks (i.e. XRPL, EVM Sidechain and Axelar Network), such as congestion, forks, or bugs that may affect the operations of the Strobe Protocol.

Price oracle risk

Price oracle risk involves the potential risk associated with the malfunction or security vulnerabilities of the underlying technology or platform on which the DeFi protocol is built. This includes risks from blockchain networks, such as congestion, forks, or bugs that may affect the operations of the Strobe Protocol.

Axelar asset risk

Currently, Strobe Protocol uses BTC and USDC price feed from Band Protocol for axlBTC and axlUSDC respectively. In case of a security incident on Axelar, there is a chance that axlBTC and axlUSDC will get depegged heavily from the price of BTC and USDC.

health factor