# Risk Disclosure

This page summarizes the major risks to consider before using Hann Finance (borrowing, holding USDHN, swapping, LP, and automation).

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**Not investment advice** — This documentation is educational. DeFi involves risks and losses are possible.
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## At a glance

* Borrowing can lead to **liquidation** and loss of collateral.
* USD-pegged assets can **depeg**; redemptions are a mechanism, not a guarantee.
* Swaps and LP can lose value due to **slippage** and **pool imbalance/depegs**.
* LST collateral can have **unbonding delays** and secondary-market liquidity risk.
* Yield-bearing receipt tokens (vault shares) can add **share-price** and **redemption/cooldown** risk.
* Cross-chain bridging (OFT) adds **cross-chain messaging and bridge configuration risk**.
* Smart contracts, oracles, and integrations can fail.

## Key risks by activity

{% tabs %}
{% tab title="Borrowers (Trove users)" %}

* **Liquidation risk:** CR can fall due to price moves, debt growth, or execution.
* **Redemption risk:** depending on protocol rules, your Trove may be affected by redemptions.
* **Collateral dependency risk:** some collateral types are wrappers/shares; their value and exit liquidity can depend on external protocols.
* **Variable parameters:** thresholds and fees can differ by collateral branch and deployment.

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Use the official UI for current parameters and always maintain a safety buffer.
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{% endtab %}

{% tab title="USDHN holders" %}

* **Peg risk:** USDHN can trade above or below $1.
* **Liquidity risk:** exiting large size can incur slippage or fail if liquidity is thin.
* **Protocol risk:** peg-defense mechanisms can be limited under stress.
  {% endtab %}

{% tab title="Earn (Stability Pool) depositors" %}

* You may receive collateral instead of pure USDHN during liquidations.
* Returns are variable and depend on protocol activity and market conditions.
* Smart contract and oracle risk applies.
  {% endtab %}

{% tab title="StableSwap / LP users" %}

* **Depeg risk:** stable pools assume assets stay near parity.
* **Slippage and MEV** can cause worse execution.
* LP positions can lose value, especially under sustained imbalance.
  {% endtab %}

{% tab title="Zapper / one-click users" %}

* One-click flows increase composability risk (more contracts, more failure modes).
* Slippage limits and deadlines are critical.
* Approvals/signatures can be abused if you sign to the wrong contract.
  {% endtab %}
  {% endtabs %}

## User safety checklist

* Use only official links and verified contract addresses.
* Start small when using leverage, loops, or one-click flows.
* Track your CR and have a plan to repay USDHN if the market moves.
* Set realistic slippage limits and short deadlines for swaps.
* Assume smart contracts can fail and size positions accordingly.