Legal
Risk Disclosure
Using the Xhavic network involves risk. Read this disclosure carefully before interacting with the protocol.
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Important
This document is not exhaustive. Additional risks may exist that are not described here. This disclosure does not constitute financial, legal, or investment advice. Consult qualified professionals before making decisions involving digital assets.
1. Protocol Risks
Xhavic is an execution network built on optimistic rollup architecture. The protocol is under active development and has not reached full decentralization. The Alpha phase operates with a single centralized sequencer managed by the Xhavic Foundation, which introduces centralization risk. Protocol upgrades, parameter changes, and governance decisions may affect the behavior and security of the network.
2. Smart Contract Risks
Smart contracts deployed on Xhavic, including core protocol contracts, bridge contracts, and the Dual Wallet System escrow mechanism, may contain undiscovered vulnerabilities. While contracts undergo formal verification and third-party audits, no audit eliminates all risk. Bugs in smart contracts can lead to loss of funds without recourse.
3. Bridge Risks
Moving assets between Ethereum and Xhavic requires interacting with bridge contracts. Bridge mechanisms carry inherent risks, including smart contract vulnerabilities at bridge endpoints, sequencer liveness failures that could delay withdrawals, and the 7-day challenge window required for standard withdrawals. LP fast-exit services introduce additional counterparty risk.
4. Market Risks
Digital assets, including the XHV token, are volatile and may lose significant value. Past performance does not indicate future results. Token prices are affected by market conditions, liquidity, regulatory actions, and network adoption. You should only interact with digital assets you can afford to lose entirely.
5. Regulatory Risks
The regulatory environment for digital assets and Layer-2 networks is evolving and varies by jurisdiction. Future regulations may restrict access to the network, impose compliance requirements, or affect the legal status of tokens and smart contracts. Users are responsible for understanding and complying with the laws applicable in their jurisdiction.
6. Technology Risks
Layer-2 execution networks depend on the security and availability of the underlying Ethereum network. Ethereum protocol changes, network congestion, or consensus failures could affect Xhavic operations. Additionally, data availability costs, sequencer downtime, and fraud proof mechanism failures represent technical risks that could impact network operation and user funds.
By using the Xhavic network and associated services, you acknowledge that you have read, understood, and accepted the risks described in this disclosure. You assume full responsibility for your interactions with the protocol.