Risk Disclosures
Last updated: November 18, 2025
These Risk Disclosures (the “Disclosures”) are issued by The Capital (“The Capital”, “we”, “us” or “our”) and apply to your access to and use of the website available at https://thecapital.one and any related interfaces, dashboards, tools, or documentation (the “Interface”).
These Disclosures are intended to help you understand the material risks associated with interacting with digital assets, smart contracts, and decentralised finance (“DeFi”) protocols. They are not a complete statement of all risks and do not constitute investment, legal, tax, or other professional advice.
By accessing or using the Interface, you acknowledge that you have read, understood, and accepted these Disclosures and that you are able to bear the economic risk of using digital assets, including the risk of a complete loss.
1. General Nature of Digital Assets and Protocols
1.1 High-risk environment. Digital assets and DeFi protocols are highly speculative, experimental technologies. Their legal and regulatory treatment is still developing and may change rapidly. You should not engage with digital assets or DeFi unless you can afford to lose all amounts you put at risk.
1.2 No guarantee of value. Digital assets may have no intrinsic value, may not be backed by any government or entity, and may derive value solely from market perception. There is no assurance that any digital asset will maintain or increase its value.
1.3 No deposit or protection scheme. Digital assets you interact with via the Interface are not deposits and are not protected by any deposit insurance, compensation, or investor-protection scheme.
2. Market Risk and Price Volatility
2.1 Extreme volatility. Digital assets can experience rapid and extreme price movements over short periods. Prices may appreciate or depreciate significantly without warning and may become worthless.
2.2 Liquidity risk. Markets for certain digital assets or protocol positions may be thin or illiquid. You may be unable to enter or exit positions at your preferred time, size, or price. In stressed market conditions, bids may disappear entirely.
2.3 Market manipulation and trading anomalies. Digital-asset markets, particularly those on decentralised venues, may be vulnerable to wash trading, spoofing, front-running, sandwich attacks, oracle manipulation, and other abusive practices. These can materially affect prices and your realised outcomes.
3. Protocol, Smart Contract, and Strategy Risk
3.1 Code risk and vulnerabilities. DeFi protocols and strategies rely on smart contracts and complex code. Even if audited or reviewed, such code can contain errors, bugs, incorrect assumptions, or overlooked edge cases. Exploits, logic flaws, or malicious code may lead to partial or total loss of the assets interacting with the affected contracts.
3.2 Design and implementation risk. Protocol or strategy design may be inherently fragile, depend on unrealistic assumptions, or rely on complex interactions between multiple contracts and external systems. A design that appears sound in ordinary conditions may fail under stress, congestion, or adverse market environments.
3.3 Upgrade, governance, and admin-key risk. Many protocols can be upgraded or altered by development teams, multisignature signers, DAOs, or other governance mechanisms. Changes to parameters, fees, collateral requirements, or contract logic may materially and adversely affect your positions. Some protocols may also have privileged roles capable of pausing, modifying, or redirecting funds.
3.4 Strategy and human error. Where strategies, routing logic, or configuration settings are used, errors in these settings, in parameter choices, or in monitoring may lead to unexpected outcomes and losses. Human error in design, deployment, or maintenance can compound protocol risk.
4. Blockchain and Network Risk
4.1 Network failures and congestion. Public blockchains may experience congestion, delays, or outages. Transactions can become stuck, delayed, reordered, or fail to confirm. Network issues can prevent you from adjusting or closing positions when needed.
4.2 Forks, re-organisations, and consensus failures. Blockchains may undergo forks, chain splits, or re-organisations. In such events, the state of your balances, positions, or transactions may become uncertain or disputed. Different service providers may treat forks differently, and there is no guarantee of support for any particular chain or fork.
4.3 Validation and finality. Transaction finality depends on the consensus mechanism of the underlying blockchain. Apparent confirmations may later be reversed in a re-organisation, affecting the status of your interactions and balances.
4.4 Network fee risk. You are responsible for network transaction fees (e.g., gas fees). Fees may become very high during congestion, making interactions uneconomic or preventing timely adjustments to your positions.
5. Stablecoin, Pegged Asset, and Oracle Risk
5.1 Stablecoin and pegged-asset risk. Assets designed to track another asset (such as fiat-pegged stablecoins or synthetic assets) may lose their peg due to market conditions, reserve issues, governance actions, or operational failings. A loss of peg may result in substantial or total loss for holders or for positions collateralised or denominated in such assets.
5.2 Oracle and pricing risk. Protocols frequently depend on oracles or other pricing mechanisms to determine asset values, collateral ratios, and liquidation thresholds. Oracles may provide inaccurate, stale, or manipulated data, whether due to design issues, technical failures, or malicious activity. Incorrect pricing can trigger unfair liquidations or mispriced trades.
5.3 Bridged and wrapped tokens. Tokens representing assets bridged from other networks or wrapped versions of other assets rely on bridging or wrapping infrastructure, which may be custodial, semi-custodial, or governed by smart contracts. Failures, exploits, or mismanagement of bridging or wrapping mechanisms may render bridged or wrapped tokens worthless or significantly impaired.
6. Liquidity Pools, Collateral, and Leverage Risk
6.1 Liquidity pool risks. In automated market makers and other liquidity pools, you may be exposed to impermanent loss, divergence loss, or other forms of loss arising from price movements between assets in the pool. Protocol rules may also impose withdrawal fees, lock-ups, or other conditions.
6.2 Collateral and margin risk. Where protocols allow leveraged positions or collateralised borrowing, small movements in asset prices may trigger margin calls or automatic liquidations. Liquidations may occur at unfavourable prices, and the process may be accelerated in volatile or illiquid markets.
6.3 Liquidation risk and slippage. Liquidations often rely on third-party liquidators, auctions, or on-chain trading venues. Slippage, oracle anomalies, or liquidity shortfalls during liquidations can exacerbate losses. There is no guarantee that collateral will be sold or recovered at or near reference prices.
7. Wallet and Security Risk
7.1 Loss of keys or access. Loss, theft, or compromise of private keys, seed phrases, passwords, or devices (including due to hacking, phishing, malware, or simple misplacement) can result in permanent loss of access to your digital assets. The Capital cannot recover or restore lost private keys or seed phrases.
7.2 Malware, phishing, and social engineering. Attackers may attempt to obtain your credentials or trick you into signing malicious transactions through fake websites, browser extensions, messages, or other means. You must remain vigilant and verify all URLs, interfaces, and approvals carefully.
7.3 Third-party wallet risk. Wallets and signing tools are provided by third parties. They may have their own security vulnerabilities, operational issues, or terms of use. Failures or compromises of these tools can lead to loss of assets or inability to interact with protocols.
8. Regulatory, Legal, and Tax Risk
8.1 Regulatory uncertainty. The legal and regulatory frameworks governing digital assets, DeFi, and related activities vary by jurisdiction and are evolving. New laws, regulations, guidance, or enforcement actions may adversely affect digital assets, protocols, service providers, or your ability to use the Interface.
8.2 Restrictions, bans, and enforcement. Authorities may impose restrictions or prohibitions on the offering, use, or trading of digital assets or DeFi protocols, or may require additional licensing, registration, or compliance measures. Such actions may result in loss of access to certain services, forced cessation of certain activities, or mandatory unwinding of positions.
8.3 Tax consequences. Transactions involving digital assets may have tax implications, including income, capital-gains, value-added, withholding, or other taxes. Tax treatment can be complex and uncertain. You are solely responsible for understanding and complying with all tax obligations that apply to you, and you should obtain independent tax advice where appropriate.
8.4 Personal responsibility for compliance. You are responsible for ensuring that your use of the Interface, protocols, and digital assets complies with all laws and regulations applicable to you, including those relating to sanctions, anti-money laundering, counter-terrorist financing, securities, commodities, consumer protection, and tax.
9. Operational, Interface, and Data Risk
9.1 Interface limitations and errors. The Interface may contain bugs, display errors, or misconfigurations that cause information to be inaccurate or incomplete (including balances, yields, risk metrics, or strategy descriptions). The Capital does not warrant that the Interface is free from defects or that it will always accurately reflect on-chain data or protocol mechanics.
9.2 Delayed, missing, or incorrect information. Data shown on the Interface may be sourced from third parties, indexers, or off-chain services and may be delayed, missing, or inaccurate. You should verify critical information directly from reliable on-chain sources or other tools before making decisions.
9.3 Service interruptions and changes. The Interface may be interrupted, suspended, or modified at any time, including for maintenance, upgrades, security reasons, or business decisions. Interruptions may impede your ability to monitor or manage positions in real time.
9.4 Third-party infrastructure risk. The Capital relies on third-party infrastructure providers (such as node operators, cloud providers, indexers, or analytics services). Outages, failures, or performance issues at these providers may affect the availability, accuracy, or performance of the Interface.
10. Counterparty and Third-Party Service Risk
10.1 Protocol counterparties and DAOs. When you interact with protocols, you may be effectively transacting with multiple counterparties, including DAOs, liquidity providers, arbitrageurs, liquidators, and other participants. The behaviour or failure of these actors may adversely affect your outcomes.
10.2 Service provider and integration risk. Where the Interface interacts with or references third-party services—such as bridges, yield aggregators, insurance providers, or analytics platforms—those services may fail, become insolvent, or behave unexpectedly. The Capital does not guarantee the performance, creditworthiness, or continued operation of any third-party service.
10.3 Insurance and protection products. Some protocols or third parties may offer insurance, coverage, or protection products. Such products may be subject to specific conditions, exclusions, capacity limitations, governance decisions, or claim-denial risks. You should not assume that any such product will fully or partially compensate losses.
11. No Advice, No Recommendation, and Independent Assessment
11.1 No personalised recommendations. Any information, metrics, rankings, or strategy descriptions available through the Interface are provided for informational and educational purposes only. They do not constitute a recommendation, solicitation, or endorsement of any digital asset, protocol, or strategy.
11.2 Independent judgement required. You must conduct your own due diligence and form your own independent judgement before engaging in any transaction or strategy. You should carefully review publicly available documentation, audits, code repositories, and community discussions where relevant.
11.3 Professional advice. You should obtain independent advice from qualified professionals (such as legal, tax, and financial advisers) before making decisions that may have legal, tax, or financial consequences for you.
12. Non-Exhaustive Nature of These Disclosures
12.1 Risks continue to evolve. The landscape for digital assets and DeFi is new and evolving. New risks emerge continuously as technology, regulation, and market structures develop. It is not possible to identify or describe every risk that may arise.
12.2 No reliance on completeness. These Disclosures highlight major categories of risk but are not exhaustive. The absence of a specific risk from this document does not mean that such risk does not exist or is immaterial.
12.3 Ongoing responsibility. It is your responsibility to stay informed about developments affecting the digital assets, protocols, and strategies you engage with, and to regularly reassess whether your risk tolerance and financial situation remain compatible with such activities.
13. Your Acknowledgements and Assumption of Risk
By accessing or using the Interface, you explicitly acknowledge and agree that:
you have carefully read and understood these Risk Disclosures;
you understand that digital-asset and DeFi activities are highly speculative and involve a substantial risk of loss, including the possibility that all assets you deploy may be lost;
you have the necessary knowledge, experience, and financial capacity to bear these risks;
you are solely responsible for all decisions you take in relation to digital assets, protocols, and strategies, and for all consequences of those decisions; and
you voluntarily accept and assume all risks described in these Disclosures, as well as all other risks associated with digital assets and DeFi, whether or not expressly mentioned herein.
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