Risk disclosures

Overview

This page is the formal risk disclosure. It's written to be useful rather than legalistic, but it is the canonical statement of what can go wrong and how the protocol responds.

Smart contract risk

Smart contracts may contain vulnerabilities that result in loss of user funds, despite audits and testing.

Every DeFi protocol carries this. Atomic's mitigations:

• Halborn audit of the deployed contracts (live since 2022).
• Bug bounty with safe-harbour terms; see Bug bounty.
• Production track record: 99%+ uptime since 2022, no critical security incidents.
• Minimal admin surface. Core contracts are immutable. There's no rug-pull pathway.

Residual risk is never zero. Trade only with funds you can afford to lose to a smart contract event.

Market risk

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

This is the trader-side risk, and it's intrinsic to leverage. Atomic's specifics:

• The 88% liquidation threshold leaves more room than most perpetuals (~60% on Hyperliquid). See Liquidations.
• The order panel shows the liquidation price before you sign. That number is the contract you're entering.
• Stop Loss orders let you define your own exit before the protocol does it for you.
• Per-market leverage caps limit maximum exposure based on liquidity depth.

None of these remove market risk. A 10x position is liquidated by an 8.8% adverse move. A 20x position by 4.4%. That's leverage doing what leverage does.

Liquidity risk (lender side)

Lenders may see withdrawal delays during periods of high pool utilisation.

The lending pool isn't on lockup, but it isn't always instant either. When most of the pool's capital is out on loan to active positions, withdrawals queue until borrowed capital comes back. Typical wait: minutes. Under sustained high utilisation: hours.

Mitigations:

• No fixed lockup. The queue is purely a function of pool dynamics.
• Fast trader turnover. Average position lifetime is short, so queues tend to clear quickly.
• Public utilisation number visible on the lending dashboard before you deposit.

This risk applies only to lenders. Trader margin sits in the trader's wallet until execution; there's no analogous queue.

The full breakdown is in Risk model.

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 connect from.

What that means in practice:

• The frontend at app.atomic.green may geoblock specific jurisdictions in response to regulatory action.
• The contracts themselves remain permissionless on Arbitrum. Alternative frontends or direct contract interaction stay available regardless of any geoblocking.
• New regulatory requirements (transaction reporting, sanctions screening, and so on) may get added to the frontend as they apply.

Atomic doesn't provide tax advice. Compliance in your jurisdiction is on you.

What's not in scope

A few risks worth ruling out explicitly:

• Bad-debt socialisation across lenders. A trader's losses can't exceed their margin (88% rule plus the 12% buffer). Lender capital isn't exposed to individual trade PnL.
• Oracle manipulation. Atomic doesn't use external price oracles. See Oracle design.
• Token price collapse. Atomic has no governance or utility token. Lender yield is paid in USDC.e.
• Custodian failure. Atomic doesn't hold anything in custody. There's no exchange-style insolvency risk here.

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 not zero. Size accordingly.

If something in the protocol's behaviour surprises you in a way this page didn't warn you about, that's a documentation bug - please report it.