Risk Disclosure
Important Notice
GX Exchange is experimental software. Trading perpetual futures involves substantial risk of loss. This document outlines the key risks associated with using the platform.
Market Risks
| Risk | Description |
|---|---|
| Leverage Risk | Leveraged positions amplify both gains and losses. A 10x leveraged position loses 10% of its value for every 1% adverse price move. |
| Liquidation Risk | If your position’s margin falls below the maintenance requirement, it will be automatically liquidated. Liquidation may result in total loss of margin. |
| Funding Rate Risk | Perpetual futures funding rates can be positive or negative. Holding positions across funding intervals incurs costs that may erode returns. |
| Volatility Risk | Cryptocurrency markets are highly volatile. Prices can move significantly in short periods, potentially triggering liquidations. |
| Slippage Risk | Large orders may experience slippage, especially in less liquid markets. The execution price may differ from the displayed price. |
Protocol Risks
| Risk | Description |
|---|---|
| Smart Contract Risk | Despite audits, smart contracts may contain undiscovered vulnerabilities that could result in loss of funds. |
| Oracle Risk | Price oracles may provide incorrect data due to manipulation, network issues, or source failures. Incorrect oracle prices can trigger improper liquidations. |
| Bridge Risk | The Ethereum-GX Chain bridge is secured by a multisig. Bridge operations carry smart contract and operational risks. |
| Consensus Risk | As a new L1 blockchain, GX Chain’s consensus mechanism has limited production history. Consensus failures could halt trading. |
| Upgrade Risk | Protocol upgrades may introduce new bugs or change economic parameters that affect positions. |
Custody Risks
| Risk | Description |
|---|---|
| Self-Custody | Users are responsible for their own private keys. Lost keys cannot be recovered. |
| Wallet Risk | Wallet software (MetaMask, etc.) may have vulnerabilities. Use reputable wallet providers. |
| Phishing Risk | Always verify you are interacting with the official GX Exchange domain. |
AI Trading Risks
| Risk | Description |
|---|---|
| AI Model Risk | AI trading strategies may fail in unprecedented market conditions. Past performance does not predict future results. |
| Technology Risk | AI systems depend on data feeds, APIs, and infrastructure. Failures in any component may result in missed trades or incorrect decisions. |
| Black Swan Risk | AI models are trained on historical data and may not handle extreme, unprecedented events. |
DeFi Risks
| Risk | Description |
|---|---|
| Impermanent Loss | Providing liquidity on GX Swap exposes you to impermanent loss when asset prices diverge. |
| Lending Risk | Borrowing and lending carry liquidation risk if collateral values decline. |
| Stablecoin Depeg | gxUSD could temporarily depeg from $1 under extreme market conditions. |
| Composability Risk | DeFi protocols interact with each other. A failure in one protocol may cascade to others. |
Regulatory Risks
- Cryptocurrency regulations vary by jurisdiction and are subject to change
- GX Exchange may not be available in all jurisdictions
- Users are responsible for understanding and complying with their local regulations
- Tax obligations on trading profits are the user’s responsibility
Risk Mitigation
- Never invest more than you can afford to lose
- Use stop-loss orders on all leveraged positions
- Diversify across strategies and assets
- Start with the Capital Guard AI tier if you are risk-averse
- Monitor positions regularly, especially in volatile markets
- Keep private keys secure and use hardware wallets for large holdings