Risk management framework
Risk management framework

General risks and safeguards

  1. 1.
    The dual liquidation strategy balances the risks associated with over-dependency on liquidators by ensuring all bad loans are timely liquidated independent of the network constraints. This critical feature mitigates adverse risks stemming from a sell-cascade event.
  2. 2.
    Whitelisted smart contracts: Access to Hashstack’s core functionality is limited to direct interaction from the user's wallet or through allowed smart contracts, mitigating the scope for bad players from discovering a vulnerability and exploiting it through smart contract automated actions.
  3. 3.
    Compartmentalised supply & borrow through minimum commitment periods improves Hashstack's ability to predict liquidity availability.
  4. 4.
    Looping & flash loans are not permitted. However, delegated contract interactions are permitted for allowlisted accounts and designated liquidators.
  5. 5.
    Tier 1 capital. Hashstack recognises that no amount of risk & security measures ensure a fool-proof system. For this reason, Hashstack will build a tier 1 capital of 15% of total deposits to absorb adverse risks. This capital will be built over a period of 18 months.
  6. 6.
    Insurance: A trusted insurance provider will insure all user-provided liquidity up to US $1,000,000.
  7. 7.
    Audits: Hashstack's contracts underwent one round of audit. Currently, a bug bounty is active. Two additional security audits will be performed on Hashstack's starknet contracts before the re-genesis version release.
  8. 8.
    Bridges: Hashstack relies on its internal relayer built atop Stargate to transfer assets between ETH L1 & Starknet L2.