Risk Disclosure

1. Important Notice

This Risk Disclosure Statement ("Disclosure") is provided to you by Vertex Protocol Inc. ("Vertex", "we", "us", or "our") in accordance with applicable laws and regulations. Trading cryptocurrency derivatives and using decentralized financial services involves substantial risk. This Disclosure is not exhaustive and does not disclose all risks associated with trading on our platform. You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

2. Not Financial Advice

The information provided on the Vertex Protocol platform, including market data, trading signals, AI agent recommendations, and educational materials, is for informational purposes only and does not constitute financial advice, investment advice, or any other type of advice. You are solely responsible for your trading decisions. We strongly recommend that you consult with a qualified financial advisor before engaging in any trading activities.

3. Market Risks

Cryptocurrency markets are highly volatile and subject to rapid price fluctuations. The following market risks apply:

• Volatility Risk: Cryptocurrency prices can fluctuate dramatically within short periods, potentially resulting in significant gains or losses.
• Liquidity Risk: During periods of extreme market stress, it may be difficult or impossible to execute trades at desired prices or to exit positions entirely.
• Gap Risk: Markets may open at prices significantly different from the previous close due to news events, regulatory actions, or technical issues.
• Correlation Risk: Many cryptocurrencies are highly correlated, meaning diversification may not provide the expected risk reduction.
• Regulatory Risk: Changes in laws, regulations, or government policies can impact cryptocurrency markets and the availability of certain Services.

4. Leverage and Margin Risks

Trading with leverage amplifies both potential profits and potential losses:

• Liquidation Risk: If the market moves against your leveraged position, your collateral may be insufficient to maintain the position, resulting in automatic liquidation and total loss of your margin.
• Margin Call Risk: You may be required to deposit additional funds on short notice to maintain open positions.
• Cascading Liquidations: In volatile markets, multiple liquidations can trigger further price movements, potentially causing losses beyond your initial margin.
• Funding Rate Risk: Perpetual contracts are subject to funding payments that can erode your position value over time, especially for long-held positions.

5. Smart Contract and Technical Risks

As a decentralized platform, Vertex Protocol relies on smart contracts and blockchain technology, which carry inherent risks:

• Smart Contract Bugs: Despite thorough auditing, smart contracts may contain undiscovered bugs or vulnerabilities that could be exploited, resulting in loss of funds.
• Oracle Failures: Price oracles may provide incorrect data due to manipulation, technical failures, or network congestion, leading to unfair liquidations.
• Blockchain Congestion: Network congestion on underlying blockchains can delay transaction execution, resulting in unexpected slippage or missed opportunities.
• Upgrade Risks: Protocol upgrades may introduce new vulnerabilities or change existing functionality in unexpected ways.
• Front-Running: Transaction ordering on public blockchains may be subject to front-running by miners or validators.

6. AI Agent and Automated Trading Risks

Using AI trading agents or automated strategies involves additional risks:

• Historical Performance: Past performance of AI agents does not guarantee future results. Strategies that performed well historically may fail under different market conditions.
• Model Risk: AI models may make incorrect predictions due to data biases, overfitting, or changes in market dynamics not reflected in training data.
• System Failures: Technical glitches, API disruptions, or server outages may prevent AI agents from executing intended trades.
• Over-Optimization: Strategies may be over-optimized for historical data and perform poorly in live markets.
• Copy Trading Risk: When copying another trader or AI agent, you are exposed to their decisions and risk management practices, which may not align with your risk tolerance.

7. Custody and Wallet Risks

Vertex Protocol operates on a non-custodial basis. You maintain control of your private keys and wallets:

• Private Key Security: Loss or compromise of your private keys or seed phrases will result in irreversible loss of access to your funds.
• Irreversible Transactions: Blockchain transactions are generally irreversible. Incorrectly sent funds cannot be recovered.
• Phishing and Scams: You are responsible for verifying that you are interacting with the legitimate Vertex Protocol interfaces and not phishing sites.

8. Regulatory and Compliance Risks

The regulatory landscape for cryptocurrency and decentralized finance is evolving rapidly. Actions by governments, regulatory bodies, or law enforcement agencies may impact the availability of Services, the legality of certain activities, or the value of your positions. You are responsible for ensuring your use of the Services complies with all applicable laws in your jurisdiction.

9. Cybersecurity Risks

Despite implementing robust security measures, no system is entirely immune to cyber attacks. Risks include hacking, distributed denial-of-service (DDoS) attacks, malware, and social engineering. Users should maintain strong security practices, including using hardware wallets, enabling two-factor authentication, and keeping software updated.

10. Total Loss Risk

YOU SHOULD ONLY TRADE WITH FUNDS YOU CAN AFFORD TO LOSE ENTIRELY. The high degree of leverage available in cryptocurrency derivatives trading can work against you as well as for you. The use of leverage can lead to large losses as well as gains. You may lose more than your initial investment and be required to deposit additional funds to cover losses.

11. No Guarantee of Platform Availability

While we strive to maintain continuous platform availability, we do not guarantee uninterrupted access to the Services. Maintenance, technical issues, network outages, or force majeure events may temporarily disrupt Services. We are not liable for any losses resulting from such disruptions.

12. Acknowledgment

BY USING THE VERTEX PROTOCOL SERVICES, YOU ACKNOWLEDGE THAT YOU HAVE READ, UNDERSTOOD, AND ACCEPT THE RISKS DESCRIBED IN THIS DISCLOSURE. YOU AGREE THAT YOU ARE SOLELY RESPONSIBLE FOR YOUR TRADING DECISIONS AND ANY RESULTING GAINS OR LOSSES. IF YOU DO NOT UNDERSTAND THESE RISKS OR ARE NOT PREPARED TO ACCEPT THEM, YOU SHOULD NOT USE THE SERVICES.

13. Contact

If you have any questions about this Risk Disclosure or the risks associated with our Services, please contact us at support@vertex.trade.