Risks

This section highlights the risks of using the XI.Finance, how we mitigate the risks and any plans to minimize these risks further.

Collateral Risk

• Description: Risk that the underlying collateral is insolvent.

• Mitigations:

  • Strict criteria for deciding what collateral to accept to back USDi.

  • Currently, the only accepted collateral are USDC, sUSDe and SUSDS.

Yield Source Risk

• Description: the source of sUSDi yield may be hacked or something like that.

• Mitigations:

  • Strict criteria for deciding which protocols to deploy collateral into, including size, what collateral a lending protocol accepts, and historical performance during periods of heightened volatility.

Smart Contract Risk

• Description: Vulnerabilities in smart contracts that USDi is deployed into, or that manage USDi collateral may make USDi insolvent.

• Mitigations:

  • We are using only audited smart contracts.

  • Internally, at least one other engineer peer reviews all smart contract code.

  • XI.Finance may also run competitions or have bug bounties in the future to gather feedback from the community.

Operational Security Risk

• Description: certain protocol functionality, such as emergency collateral rescue functions, are controlled by permissioned roles, which may become compromised.

• Mitigation:

  • All admin roles are multisigs.

  • All end-signers are cold wallets.

  • The team cannot unilaterally execute transactions, there must be at least one external signer.