⚠️ Risk Overview

At Wellspring, we work hard to make saving and earning as safe as possible. But like any financial product—especially those involving crypto—there are some risks to be aware of.

Here’s what you should know in plain language:

🟢 Lending Risks

• When you deposit funds, they are lent out to borrowers.
• Borrowers must put up more collateral than they borrow to help protect your money.
• If markets move quickly, collateral can lose value and get sold to repay the loan (called liquidation).
• Extreme price swings in markets could lead to some losses.

🟢 Smart Contract Risks

• Your deposits are managed by non-custodial smart contracts (automated code that does not own the rights to your funds).
• Even though these systems are reviewed and audited, there is always a chance of bugs or vulnerabilities that could be exploited.

🟢 Stablecoin Risks

• Your deposits are converted into stablecoins designed to stay equal to $1.
• In rare situations (like major market stress), a stablecoin can lose its peg and drop below $1 in value.

🟢 Account Security Risks

• Your account is self-custodial, meaning you fully control your funds.