Risks

All programs i.e. smart contracts are subject to risks.

As Sujiko deploys programs, the platform is not immune to said vulnerabilities.

Bearing this in mind, we clearly communicate the associated risks and make sure to mitigate them by implementing best-in-class protocol guardrails and program audits by third parties (audit pending).

CEX and DEX perps utilise an index price for each market. The index price is used to calculate the funding rate payments and liquidations. For DEXs, the index price is provided by an oracle. Oracles introduce a risk where the oracle can report incorrect prices which can result in wrongful liquidations and incorrect funding payments.

Contingent orders, such as “stop-loss” or “stop-limit” orders, may not limit losses to the expressed amount, and market conditions may make it impossible to execute an order or to obtain the stop price. Under certain market conditions, perpetual futures may also trade at prices that don't match the prices of the underlying asset.

Markets for reference assets and derivative products can sometimes become "illiquid,". Thinly traded markets have a potentially increased risk of loss as they may experience high volatility of prices. In such markets, traders may find it impossible to open and close market positions — except at very unfavourable prices.

Solana is still in beta and under development, which introduces technical and security risks. If the network is degraded, transactions necessary to complete trades may not confirm in time, which in turn introduces a risk of untimely liquidation and missed opportunities.

If the value of a trader's collateral drops below their maintenance margin fraction, their collateral can be liquidated.

In the event of large-scale liquidations or market turmoil, it may not be possible to liquidate positions and balances in time to cover the losses taken out by the liquidated trader.

When Sujiko's vAMM fills an order, it acts as the counterparty to that trade. As a result, the vAMM takes on inventory, which introduces delta risk. During periods of significant volatility, there is a risk that the imbalance between longs and shorts will increase significantly. This will reduce the amount of liquidity offered by the vAMM.

We’d like to circle back and stress that all programs i.e. smart contracts are subject to risks. Additionally, UI bugs might arise as well. Both programs and UI risks can be exploited and result in loss of funds.