Investing in, buying, selling, holding and using digital assets and cryptocurrencies involve very high levels of risk.

Engaging in lending and borrowing activities further intensifies such risks, and carries its own unique set of risks.

Operating on a decentralized, open-source software based platform involves additional risks.

You should not engage in such activities unless you understand and are able to assume such risks, including the full loss of your digital assets or their value.

Below we provide a non-comprehensive list of risks related to digital assets, lending and borrowing, the use of the Texture protocol and the TXR token - note that these are not all of the risks, and it is your sole responsibility to make sure you are familiar with all the risk factors applicable to you before participating in any transaction or making any trading or investment decision. You should never commit funds you don't have or that you cannot afford to lose.

Texture does not provide any legal, accounting, tax or financial advice, and does not take into account, when providing any service, software or content, your individual goals, needs, abilities and risk tolerance. It is your responsibility to assess whether any transaction, investment or decision is appropriate for you in light of your personal circumstances, and to consult with your independent professional advisors.

1. Risks Related to Digital Assets (including TXR token)
   1. Digital assets are often unregulated, and do not provide their holders with the same legal protections provided to holders of fiat currencies or traditional investments.
   2. The value of Digital assets is highly volatile, meaning their value can change constantly, swiftly and dramatically.
   3. The value of digital assets can be affected by a plethora of factors and occurrences, and is very unpredictable.
   4. Digital assets can become worthless, resulting in the entire investment or purchase price being permanently lost.
   5. Changes to legal and regulatory frameworks across various jurisdictions may render any digital asset, or any activity involving digital assets, prohibited or restricted, with or without prior notice.
   6. The existence of an active marketplace and sufficient liquidity for digital assets are not guaranteed, and accordingly you may not be able to sell them at their fair value, or at all.
   7. Digital asset transactions typically are irreversible. Assets stolen, unlawfully gotten or erroneously transferred might be irrevocably lost.
   8. Digital assets are susceptible to fraud, hacks, theft and attacks.
   9. Projects, issuers, exchanges and custodians are susceptible to failure, bankruptcy, fraud, hacks, theft and attacks, which may result in them not being able to fulfill their obligations, including to return your assets to you.
   10. Loss of private keys or hardware wallets may result in irrevocable loss of your assets; anyone with access to your private keys or hardware wallets has access to your assets.
   11. Participating in any token offering (including ICO, IDO, IEO, private or public sale) may involve additional risks, including the possibility of the project never launching and the purchased tokens never being provided.
   12. Tax treatment of digital assets may differ from other assets.
   13. Financial institutions, banks or other entities handling fiat currencies may be unwilling or unable to accept payments originating from digital assets.
2. Risks Related to Lending and Borrowing
   1. Lending and borrowing services on the Texture platform involve financial risk and should only be used by users who understand how decentralized finance protocols operate and are familiar with the risks involved.
   2. Using the lending and borrowing features on Texture exposes users to price fluctuations of the underlying digital assets. Borrowing against collateral creates financial exposure that may result in losses if asset values change significantly.
   3. Loans on Texture are subject to liquidation under certain circumstances, including where the value of collateral falls below required thresholds. A position being liquidated results in the collateral being sold to cover the outstanding loan, and the user shall lose access to the liquidated collateral.
   4. As liquidations occur automatically and based on data pulled from third party sources, there is a risk that a position may be liquidated based on inaccurate data or outlier data, or that the liquidation is not timely executed due to technical error or any other reason, and a position may continue to incur losses beyond an expected liquidation point. Texture shall have no liability in any such case, and you should always monitor the health of your lending and borrowing positions.
   5. Lending, borrowing and maintaining positions may incur fees and charges, which are subject to change from time to time.
   6. Transactions are executed at the then-available price. Prices may change swiftly, and the price visible on the platform may not be the same price at which a transaction is ultimately executed. Errors, bugs or congestion in the platform or the underlying blockchain may cause delays before a transaction is settled and approved. The final price shall be the one available at the time the transaction is executed.
   7. Transactions are executed via smart contracts, based on the relevant data pulled at the relevant time. Texture is not required to, and does not, guarantee “best execution”, i.e. that the price available shall be the most favorable to you.
3. Risks Related to the Use of the Texture Protocol
   1. Lending and borrowing positions do not carry any intrinsic value outside of the Texture platform, and you might not be able to close out, sell or take any action in connection with any open position away from the platform.
   2. Texture’s protocol and platform are based on multiple proprietary, third party and open-source components, and any failure, delay or error in any such component may result in a failure, delay or error in the platform, protocol or any transaction. Any such occurrence may result in systems failure, unavailability, affected transactions and loss of funds. Texture would not be responsible for any such outcomes or any other detriment to users.
   3. In the event of failure or unavailability of the platform or any component thereof, you might be unable to take any action in connection with an open lending or borrowing position (or open a new one) until such issue is fixed. Similarly, based on your location or other factors, your access to the platform may be limited. Texture assumes no responsibility in connection with any error, downtime or inaccessibility, and you bear all the risks involved in any delay or inability to take any action.
   4. Smart contracts and pools are subject to hacks and different types of attack. While we take very seriously our commitment to the platform’s safety, there is a risk that any contract, pool or underlying blockchain or other technology component will be attacked by malicious actors, or suffer a technical failure resulting in funds being stolen or lost. Texture does not custody any assets held on the platform, and any assets, including open lending positions, borrowed assets, assets provided as liquidity and TXR tokens staked on the platform are transacted directly between a user’s self-custody wallet and on-chain contracts or pools. Accordingly, Texture will not bear any liability for assets lost or stolen, and you assume full responsibility for such risks.
   5. Texture does not endorse or recommend any assets, either by adding a lending or borrowing opportunity involving such asset, any announcement of the same, or otherwise. We do not conduct any diligence in connection with the merits or the appropriateness of any asset for lending or borrowing, and we assume no responsibility whatsoever in connection with the performance of such assets.
   6. Being a decentralization-oriented project, it is Texture’s vision to gradually allocate control over the protocol to the community. Subject to Texture’s governance model, changes to the code, platform and lending/borrowing options shall gradually become the prerogative of TXR token holders, which may result in decisions adopted by vote which may be detrimental to you or your lending and borrowing activities.