Risk disclosures

Overview

This page is the formal risk disclosure. It is written to be useful, not legalistic - but it is the canonical statement of what can go wrong and what the protocol does about it.

Smart contract risk

Smart contracts may contain vulnerabilities that allow loss of user funds despite audits and testing.

Every DeFi protocol carries this risk. Atomic mitigates it via:

• Halborn audit of V2 (live since 2022). V3 audit scheduled Q2 2026.
• Bug bounty with safe-harbour terms; see Bug bounty.
• Track record of 99%+ uptime since 2022, zero critical security incidents.
• Minimal admin surface - core contracts are immutable; no rug-pull pathway exists.

Residual risk is non-zero. Trade only with funds you can afford to lose to a smart contract event.

Market risk

Leveraged trading creates amplified gains and losses. Positions face rapid liquidation during volatility. There are no profit guarantees.

This is the trader-side risk and is structural to leverage. Atomic's specific mechanics:

• 88% liquidation threshold gives positions deeper survival room than most perpetuals (~60% on Hyperliquid). See Liquidations.
• Order panel preview shows liquidation price before signing - that number is the contract you are entering.
• Stop Loss orders allow you to define your own exit before the protocol does it for you.
• Per-market leverage limits cap the maximum exposure based on liquidity depth.

None of these eliminate market risk. A 10x position can be liquidated by an 8.8% adverse move, and that is the entire point of leverage.

Liquidity risk (lender side)

Lenders may experience withdrawal delays during periods of high pool utilization.

Atomic's lending pool is non-lockup but not always instant. When most pool capital is deployed against active positions, withdrawals queue until borrowed capital returns. Typical delay is minutes; under sustained high utilization, hours.

Mitigations:

• No fixed lockup - the queue is purely a function of pool dynamics.
• Fast trader turnover - average position lifetime is short, so queues clear quickly.
• Public utilization metric - visible on the lending dashboard before depositing.

This risk applies only to lenders. Trader margin is in the trader's wallet at all times until execution; no analogous queue exists.

See Lending → Risk model for full detail.

Regulatory risk

The regulatory landscape for DeFi is evolving. Platform availability or functionality may change in certain jurisdictions.

Atomic is a non-custodial protocol; the contracts are open-source and deployed on a public chain. The frontend and any operational support may be subject to local regulation in jurisdictions where the team operates or where users access from.

What this means in practice:

• The frontend at app.atomic.green may geoblock specific jurisdictions in response to regulatory action.
• The contracts themselves are permissionless on Arbitrum; alternative frontends or direct contract interaction remain available regardless of geoblocking.
• New regulatory requirements (e.g. transaction reporting, sanctions screening) may be added to the frontend as they apply.

Atomic does not provide tax advice. You are responsible for your own compliance in your jurisdiction.

What is not in scope

A few risks worth being explicit about removing:

• Bad-debt socialization across lenders. A trader's losses cannot exceed their margin (the 88% rule + 12% buffer). Lender capital is not exposed to individual trade PnL.
• Oracle manipulation. Atomic does not use external price oracles. See Protocol → Oracle design.
• Token price collapse. Atomic has no governance or utility token; lender yield is paid in USDC.e.
• Custodian failure. Atomic holds nothing in custody. There is no exchange-style insolvency risk.

How to use this disclosure

Read it once before depositing or opening a leveraged position. The mitigations are real but not exhaustive; the residual risks are real and non-zero. Size accordingly.

If something in the protocol's behavior surprises you in a way this page did not warn you about, that is a documentation bug - please report it.