Risk Disclosure

1. Liquidation risk

This is the main one. Each market has a maximum loan-to-value. If your stock falls far enough that your debt crosses that line, anyone can repay part of your debt and take some of your collateral, plus a bonus, as payment.

A liquidator takes only what is needed to cover the debt and the bonus — the rest stays yours, and your whole position is never seized. But you will still be left with less stock than you deposited, and the loss is permanent.

Borrowing near your limit makes this near-certain over time. A position opened at the maximum LTV can be liquidated by a single bad day.

2. Stale prices outside market hours

Leave extra headroom before weekends, earnings dates and holidays.

3. Oracle risk

Valuations depend on third-party Chainlink price feeds. A feed can be delayed, halted, or report a wrong price. A price that is too low can liquidate you unfairly; one that is too high can leave the market with bad debt. Kept does not operate these feeds and cannot override them.

During corporate actions the oracle is deliberately paused and borrowing is unavailable until it resumes.

4. Smart contract risk

Your funds interact with immutable code. A defect in Morpho, in the price oracles, in the token contracts, or in our own unaudited router could result in total loss. Our router has not been audited. We disclose that on the transparency page rather than bury it.

5. Issuer and token risk

Stock Tokens are debt securities issued by a third party, not shares. You do not own the underlying equity and have no shareholder rights. You are exposed to the issuer's solvency and to its ability to keep honouring redemptions. If the issuer fails, the token may become worthless regardless of what the underlying stock does.

6. Stablecoin risk

USDG is intended to hold a one-dollar value but is not guaranteed to. If it depegs, the real value of what you borrowed — and of what you must repay — changes.

7. Market and volatility risk

Single-stock collateral is volatile. Individual equities routinely gap 10–20% on earnings, guidance or news. A concentrated position in one ticker is far riskier collateral than a broad index.

8. Liquidity risk

Each market only holds the USDG that lenders have supplied. Most markets here hold very little. Low liquidity can mean you cannot borrow the amount you want, and can make liquidations more severe.

9. Interest rate risk

Borrow rates float with supply and demand and can rise sharply without notice. Interest accrues every second and increases your debt, which moves you closer to liquidation even if the price never changes.

10. Regulatory and tax risk

The rules for tokenized securities and on-chain credit are unsettled and vary by country. Access may be restricted or withdrawn. Borrowing is generally not a taxable disposal, but liquidation usually is — you can end up with a tax bill on stock you did not choose to sell. We are not tax advisers.

11. Operational risk

You are responsible for your keys. Lost keys mean lost funds and there is no recovery. Phishing sites imitating this one exist; always check the URL. Wallet, RPC and network outages can stop you acting at the exact moment you need to.

12. No recourse

Kept is non-custodial. We cannot reverse a transaction, cancel a liquidation, restore a lost key, or compensate you for a loss. There is no ombudsman, no chargeback and no compensation scheme.

How to reduce your risk

• Borrow well below the maximum — many people treat half the limit as a ceiling.
• Watch your health factor on the loans page, especially before weekends.
• Prefer broad ETFs over single tickers where you can.
• Keep spare USDG so you can repay quickly if the price moves.
• Understand that a liquidation may create a taxable event for you.

Nothing here is investment advice. If you do not fully understand a risk on this page, do not borrow.