Impermanent Loss in the context of Takaturn 2.0
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Last updated
Last updated
Takadao has structured the Takaturn 2.0 YG feature together with and the risk factors stated earlier in this document have been minimized as follows:
Systemic risk - we have minimized this risk factor by using assets with the largest market capitalization eg. ETH
Impermanent loss - this risk has been minimized through the use of closely correlated trading pairs, more specifically ETH/wETH trading pairs which has a 1:1 price parity
The above can be considered risk management strategies to reduce risk to participants in the Takaturn 2.0 offering. There is an additional risk factor that needs attention, this relates to smart contracts in general, rather than specifically to the Takaturn 2.0 offering. This risk relates to and more specifically:
Smart Contract Vulnerabilities & Hacking Risks - are written in that automates functions like lending, borrowing, staking, treasury management etc.
All these functions are financial transactions involving large amounts of money (fiat and digital), and will always be targeted by wanting to drain these smart contracts of their funds. These hackers find and exploit vulnerabilities (bugs) in the computer code and generally steal money. To avert this risk Takadao will firstly conduct an internal audit on its smart contracts and employ blockchain cybersecurity experts to conduct independent audits on our smart contracts as well.
Hacking risk covers smart contract bugs but it also broadly includes the risk that external protocols face from exploits in their code (these external protocols are all automated by smart contract code and could have vulnerabilities in its code as a ), being one of the cases in point, losing $1m in a code vulnerability exploit. Investors and users of the Cypher.trade platform stand to lose $1m as a result.
To prevent this type of eventuality Takadao will choose platforms with proven security prevention records.
Takadao’s approach to security involves using the services of ‘whitehats’ or as a means of finding and fixing vulnerabilities in its smart contract code. Takadao will offer a ‘’ to whitehats for this purpose. The bug bounty is the reward to whitehats for finding code vulnerabilities.