> For the complete documentation index, see [llms.txt](https://docs.hann.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.hann.finance/security/risk-disclosure.md). # Risk disclosure Liquidation, asset-value, withdrawal, execution, and bridge conditions ## USDHN borrowing A Trove's collateral ratio falls when the collateral's oracle value falls or its debt grows. Accrued interest and borrowing fees increase debt. A Trove that enters its branch's liquidation conditions can lose collateral to debt settlement and liquidation penalties. Redemptions also affect borrowers. USDHN holders can redeem through the protocol, reducing both the debt and collateral of the Troves reached by the redemption order. A redemption can reduce your collateral exposure even when the Trove is above its liquidation threshold. Each branch has its own individual and system collateral-ratio rules, price feed, and shutdown conditions. [Borrowing and liquidation](/protocol/borrowing-and-liquidation.md) explains the resulting position changes. ## Lending markets A lending account's health factor combines collateral values, liquidation thresholds, and total debt. Below 1, the account meets the health-factor condition for liquidation. A liquidator repays debt and receives collateral with the applicable liquidation bonus. Borrowing rates change with market utilization. Interest increases debt over time. Withdrawing collateral or borrowing more reduces the account's borrowing capacity and can lower its health factor. Withdrawals also require available pool liquidity and compliance with the account's collateral requirements. See [lending markets](/protocol/lending.md) for supply, borrowing, repayment, and collateral settings. ## Holding USDHN USDHN trades at a market price that can be above or below $1. A sale depends on available liquidity; larger trades can receive worse prices or fail the selected output limit. Protocol redemptions use collateral valuation, fees, branch availability, and oracle conditions. These conditions determine the collateral received and whether a redemption can execute. Market selling and protocol redemption have different prices and costs. ## Earn deposits Stability Pool deposits absorb liquidated USDHN debt. During an offset, part of a depositor's USDHN is consumed and the depositor receives a share of the liquidated collateral. The value of that collateral follows its market price. Interest and liquidation proceeds depend on pool activity. The displayed annualized return changes with those amounts and the pool's deposits. Holding an Earn position therefore changes both the amount and composition of the assets you can withdraw or claim. ## bKAIA, HNKAIA, and vault collateral | Asset or operation | Condition and result | | -------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | bKAIA unstaking | An unstaking request creates tickets at underlying staking nodes. KAIA is claimable after the relevant tickets are ready. Selling bKAIA on a market uses that market's price and liquidity. | | Partial bKAIA request | A request can route part of the amount or open no tickets. Shares are burned for the routed amount; the unprocessed shares remain. Inspect the created tickets and amounts before requesting the remainder. | | HNKAIA mint or redemption | Output follows the vault's asset balances and conversion rates. A single-asset exit requires enough of the selected asset and applies its redemption fee. | | Yield-bearing vault shares | Share value and the amount of underlying tokens received follow the vault's accounting. Exit limits or cooldowns can delay access to the underlying asset. | | Shares used as collateral | A fall in the share's oracle value reduces collateral value while the borrowing debt and interest remain outstanding. | Staking nodes, vaults, wrappers, and their rate sources are dependencies of these assets. [bKAIA and HNKAIA](/protocol/bkaia-and-hnkaia.md) describes deposits and exits. ## Swaps and liquidity provision StableSwap pricing depends on pool balances, amplification, fees, and asset rates. A sustained depeg or imbalance can leave liquidity providers holding a larger share of the asset that has lost value. Trade size, price changes, and transaction ordering affect execution. A `minOut` limit rejects an output below the specified amount; a deadline rejects late execution. Neither protects the market value of tokens after execution. LP tokens represent pool assets. Staking LP tokens adds the reward contract's deposit and withdrawal rules. Pool fees and staking rewards vary with activity and allocation. ## Leverage and Zappers A leveraged position has more collateral exposure and more debt. A smaller adverse price move can consume the remaining equity and bring the position into liquidation. A Zapper combines collateral conversions, borrowing or repayment, and swaps. Its result depends on all contracts in the selected route. An output-limit or deadline failure reverts the protected transaction; previously completed approvals remain, and network gas is still spent. An approval or Permit2 signature grants the specified spender access under its amount and expiry limits. Signing permission for the wrong spender can expose tokens covered by that permission. ## Cross-chain transfers A bridge has separate source- and destination-chain stages. A successful source transaction can be followed by a pending destination delivery. The route depends on bridge configuration, cross-chain messages, destination support, and recipient details. Fees and the destination chain's gas requirements affect the arriving amount and subsequent use. Transfer failures or delays can prevent access to the assets while delivery or recovery is unresolved. ## Contracts, prices, and external services Contract errors, incorrect or stale oracle inputs, staking-node failures, and bridge or vault failures can misprice positions, interrupt operations, or cause asset losses. Pause controls, branch shutdowns, asset limits, and authorized parameter changes affect the operations available to users. The selected network and deployment determine the applicable contracts and settings. Use the action's current amounts, collateral requirements, fees, and exit conditions when evaluating its effect on an existing position. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.hann.finance/security/risk-disclosure.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. 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