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Using ArcX involves smart-contract, market, credit, oracle, and rewards-program risk. Read this page before depositing, trading, or claiming.

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No Guaranteed Rewards

CreditTokens are used for reward distribution, but no reward is promised. There is no guarantee that:
  • an underlying protocol conducts a TGE
  • an underlying protocol distributes rewards
  • a market maker receives rewards
  • a market maker funds the distribution contract
  • CreditTokens convert to reward tokens at any fixed ratio
  • rewards have market value
CreditTokens are not exchange points and do not give holders a direct claim against any underlying protocol.

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Points Program Risk

Underlying points programs are controlled by their own protocols. They may change rules, adjust balances, apply multipliers, exclude accounts, claw back points, delay distributions, or end a program. Different market maker accounts can receive different treatment. A points-to-token conversion ratio for one account may differ from another account.

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Market Maker Risk

Each vault depends on a market maker. The market maker borrows capital, runs the strategy, receives points or rewards in its own account, and funds the relevant CreditToken distribution contract when rewards are shared. ArcX uses Wildcat lending markets or related third-party lending infrastructure for the borrowing relationship behind a vault. These systems can introduce additional smart-contract, borrower, liquidity, and operational risks. ArcX does not control Wildcat protocol behavior or guarantee market maker repayment. Users take the risk that a market maker:
  • defaults on borrowing obligations
  • performs worse than expected
  • receives fewer points or rewards than expected
  • is excluded from a points program
  • does not fund the distribution contract
  • is delayed in funding the distribution contract
Market maker selection is part of the risk users take when choosing a vault or series.

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Oracle Weight Risk

CreditToken minting uses period weights submitted through an oracle process. Period weights are intended to reflect relative reward contribution across credit periods. Period weights depend on market maker information and other off-chain inputs. Incomplete or incorrect information can affect how many CreditTokens are minted for each period.

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Smart Contract And Execution Risk

ArcX uses smart contracts for vault shares, ST, EPT, CreditTokens, order settlement, credit accounting, and reward distribution. Bugs, exploits, chain outages, bridge failures, or incorrect integrations can cause losses. ArcX also uses an off-chain matching service to find candidate order matches. Settlement is checked on-chain against user APR, slippage, and order constraints, but the matching service can be unavailable or delayed.

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Liquidity And Pricing Risk

ST, EPT, and CreditTokens can trade with limited liquidity. Prices can move quickly, spreads can widen, and users may be unable to exit at the price they expect. EPT pricing depends on time remaining, expected CreditToken generation, expected reward value, market maker risk, and liquidity. These assumptions can change.

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Regulatory And Access Risk

ArcX access may be restricted by jurisdiction, sanctions screening, or interface rules. Regulatory treatment of DeFi, reward exposure, CreditTokens, and reward distributions can change. See Restricted Jurisdictions for the current ArcX interface restrictions. Users are responsible for understanding whether they may access ArcX and whether participating has tax, legal, or reporting consequences in their jurisdiction.

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No Deposit Insurance

ArcX positions are not bank deposits. They are not insured, protected, or guaranteed by any government, regulator, deposit insurance scheme, or investor compensation scheme.