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Risks and Limitations
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Key Risks
DeFi protocols have been hacked before and there is a large incentive to steal user assets from the protocol. Votre has been designed in such a way that minimizes hack surface area to, on average, around ~25% of TVT (Total Volume Traded), since users take the majority out as a loan day one.
Note on mitigation: Votre works with top security firms in the space to ensure user funds are protected from hackers. Votre will also run a bug bounty program to disincentivize hacking and encourage bugs to be reported for a smaller, legal payoff.
These include sequencer downtime, MEV, or any other bespoke risk to any layer 2 Votre is deployed on.
Users, when repaying loans, must consider the liquidity of the market they are repaying into. If the Uni v3 pool is illiquid, slippage could eat up a large portion of repaid funds, leading to poor execution.
Votre relies on Chainlink oracles to provide accurate, real-time pricing data for supported assets. If Chainlink experiences downtime, latency, or inaccurate price reporting (e.g., during extreme market volatility or network congestion), this could lead to incorrect valuations, mispriced loans, or temporarily halted operations.
Crypto asset prices are inherently volatile, and large swings in market value can affect user positions. Borrowers remain exposed to changes in the value of their collateral; if the market price of their pledged assets declines significantly, the user’s effective loan-to-value (LTV) ratio increases, potentially leading to loss of value upon repayment.
Note on mitigation: Votre’s non-liquidating design protects users from forced liquidations, but borrowers should still manage exposure responsibly.
DeFi lending protocols operate in a rapidly evolving regulatory environment. Changes in how digital assets, stablecoins, or decentralized credit markets are regulated could affect Votre’s operations or user accessibility in certain jurisdictions.
Note on mitigation: Votre maintains active dialogue with legal counsel across key jurisdictions and structures its entities in compliance with applicable laws. The protocol also adapts product design and disclosures as regulatory clarity improves.
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Key Limitations
This can be partially mitigated with rolls and even more so with "auto-roll", which remains under development
Where there is money to be made, solvers tend to participate.
Limited automated market maker (AMM) liquidity can make it difficult to exit or hedge positions efficiently, especially in less popular markets. This is rarely an issue as we will only add assets with healthy spot markets, but it's still a factor when considering broader product expansion.
Votre can be a lot for the average user to understand, which is why we're committed to transparency and simplicity.
Solvers may not always provide roll pricing, which is a risk.
Assets with extreme volatility or limited liquidity — such as newly launched memecoins or fringe tokens — are often not quoted by solvers, which restricts the range of tokens we can effectively support.
It's arguably better to have the market absorb this sale in good times rather than bad, however market impact is largely unavoidable, as it's inherently bearish to borrow against an asset.