417 lines
22 KiB
XML
417 lines
22 KiB
XML
import type { NextPage } from 'next'
|
|
import { serverSideTranslations } from 'next-i18next/serverSideTranslations'
|
|
|
|
export async function getStaticProps({ locale }: { locale: string }) {
|
|
return {
|
|
props: {
|
|
...(await serverSideTranslations(locale, ['common'])),
|
|
},
|
|
}
|
|
}
|
|
|
|
const Risks: NextPage = () => {
|
|
return (
|
|
<div className="rounded-2xl border-2 border-th-fgd-1 bg-th-bkg-1 p-6">
|
|
<h1 className="mb-4">Risks</h1>
|
|
<p className="mb-3">
|
|
<b>KEY INVESTOR INFORMATION:</b> This document provides you with key
|
|
information about the Mango Markets Boost! Leveraged Staking product and
|
|
the risks involved. It is not marketing material. The information is
|
|
required to help you understand the nature and risks of investing in
|
|
this product.You are advised to read it so you can make an informed
|
|
decision about whether to invest.
|
|
</p>
|
|
<p className="mb-3">
|
|
<b>IMPORTANT INFORMATION: CAPITAL AT RISK</b> The value and income of
|
|
investments in the following product can fall as well as rise and are
|
|
not guaranteed. Investors may not get back the amount originally
|
|
invested.
|
|
</p>
|
|
<p className="mb-3">
|
|
<b>IMPORTANT INFORMATION:</b> Investments in the leverage staking
|
|
product are subject to market fluctuations. The value of your
|
|
investment, as well as the income derived from it, can increase or
|
|
decrease. There is no assurance of recovering the initial investment
|
|
amount. It's crucial to understand that decentralized finance
|
|
(DeFi) lending products, including those offered on permissionless
|
|
blockchains, operate independently of Mango Markets DAO.
|
|
</p>
|
|
<p className="mb-3">
|
|
This leverage product, known as Boost! v2, allows users to deposit JLP
|
|
and SOL liquid staking tokens (LSTs), to be used as collateral in the
|
|
borrowing of USDC (if boosting JLP) or SOL (if boosting LSTs) at a
|
|
variable interest rate. The USDC or SOL is used to purchase additional
|
|
tokens, creating increased exposure.
|
|
</p>
|
|
<p className="mb-3">
|
|
The product entails various fees, including variable collateral fee
|
|
rates (if boosting JLP), loan origination fees, and variable loan
|
|
maintenance fees. The value of your position is directly affected by
|
|
changes in the USDC or SOL interest rate and the market value of the
|
|
deposited tokens. Typically, an increase in borrow interest rates, or a
|
|
decrease in value of the deposited tokens, will lead to a decrease in
|
|
the value of your position, potentially resulting in liquidation.
|
|
</p>
|
|
<p className="mb-3">
|
|
The Boost! leverage staking product relies on external oracles to
|
|
provide real-time price feeds for deposited tokens, USDC and SOL. These
|
|
oracles are essential for ensuring accurate collateral valuation.
|
|
However, investors should be aware that oracle data is subject to risks
|
|
of manipulation, delay, or inaccuracies. Such issues with oracle feeds
|
|
can lead to improper valuation of deposited assets, potentially
|
|
triggering unintended liquidations or affecting the overall performance
|
|
of your investment.
|
|
</p>
|
|
<p className="mb-3">
|
|
Investors should also be aware of the inherent smart-contract risks
|
|
associated with the Boost! leverage staking on the Mango Markets DAO.
|
|
These risks include, but are not limited to, vulnerabilities in the
|
|
contract code that could potentially be exploited, leading to financial
|
|
loss.
|
|
</p>
|
|
<p className="mb-6 font-bold">
|
|
Please consider these risks carefully before using Mango Markets Boost!
|
|
Leveraged Staking.
|
|
</p>
|
|
<h3 className="mb-3">1. Why Boost JLP or LSTs?</h3>
|
|
<p className="mb-6">
|
|
Increased Exposure and Returns: Amplifies investment in JLP/LSTs,
|
|
leveraging USDC/SOL to enhance yield potential and market position
|
|
without the need for extra capital.
|
|
</p>
|
|
<h3 className="mb-3">2. Why Not Boost JLP or LSTs?</h3>
|
|
<p className="mb-6">
|
|
Risk of Liquidation: High volatility in the JLP/LST and USDC/SOL market
|
|
can rapidly depreciate collateral value, triggering liquidations and
|
|
potential loss of investment.
|
|
</p>
|
|
<h3 className="mb-3">3. Boosting</h3>
|
|
<p className="mb-3">
|
|
Boosting offers a significant advantage by amplifying investors'
|
|
exposure to JLP/LSTs and their associated yield through USDC or SOL
|
|
borrowing, which facilitates the acquisition of additional amounts of
|
|
JLP or LSTs, enhancing potential gains. This strategic leverage allows
|
|
investors to expand their market position and potentially increase
|
|
returns without the need for additional capital investment upfront. The
|
|
product operates within a framework of carefully calibrated risk
|
|
parameters, managed by the Mango DAO, to balance growth opportunities
|
|
against the inherent risks of the JLP/LST and USDC/SOL markets.
|
|
</p>
|
|
<p className="mb-3">
|
|
However, this increased exposure is not without its costs. The primary
|
|
risk associated with leveraging investments in this way is the
|
|
heightened potential for liquidation. In volatile market conditions, the
|
|
value of collateralized assets can rapidly decline, possibly triggering
|
|
liquidations to cover outstanding liabilities. Moreover, the mechanism
|
|
of leveraging and the associated costs and fees of borrowing, introduce
|
|
additional costs that can impact the overall profitability of
|
|
investments.
|
|
</p>
|
|
<p className="mb-3">
|
|
It's critical to carefully evaluate the balance between the
|
|
benefits of increased exposure to underlying assets and the risks of
|
|
liquidation, losses, and fees. The high-risk nature of leveraged
|
|
cryptocurrency products demands a thorough understanding of market
|
|
dynamics and risk management strategies to navigate potential downturns
|
|
effectively
|
|
</p>
|
|
<h3 className="mb-3">4. JLP token</h3>
|
|
<p className="mb-3">
|
|
JLP (Jupiter Liquidity Provider) tokens are assets that users receive
|
|
when they become liquidity providers on the Jupiter Perpetuals platform.
|
|
Holding JLP allows users to earn a portion of the fees generated by the
|
|
platform, with the token's value and yield being dynamically
|
|
influenced by trading activities and market conditions. JLP is a native
|
|
Solana Program Library (SPL) token. It represents a significant
|
|
component of the platform's liquidity provision, directly linking
|
|
holders to the platform's financial ecosystem and its associated
|
|
risks and rewards.
|
|
</p>
|
|
<p className="mb-3">
|
|
The value of JLP tokens is closely tied to the operational dynamics of
|
|
the Jupiter Perpetuals platform. It reflects a share in the pool
|
|
containing the trading fees generated, trader's profit and loss and
|
|
70 percent of generated fees. Inspired by GMXv1, JLP's worth
|
|
increases with the platform's trading volume and fee generation,
|
|
offering holders a direct stake in the platform's success. This
|
|
dynamic pricing mechanism ensures that JLP holders benefit from the
|
|
platform's financial activities.
|
|
</p>
|
|
<p className="mb-3">
|
|
The current composition of the JLP pool reflects a mix of major
|
|
cryptocurrencies, including SOL, ETH, WBTC, USDC, and USDT, each with
|
|
specific target allocations and utilization rates. Target rates in the
|
|
JLP pool ensure that the pool remains diversified and resilient to
|
|
market volatility. While offering a mix of low volatility and high
|
|
yield, JLP represent a high risk investment due to potential smart
|
|
contract vulnerabilities and market-related risks. As an index fund of
|
|
major cryptocurrencies, JLP provides broad exposure, diversifying
|
|
portfolios but also introducing complex market risks.
|
|
</p>
|
|
<h3 className="mb-3">5. Objectives and Policy</h3>
|
|
<ul className="ml-6 list-outside list-disc">
|
|
<li className="mb-3">
|
|
Boost! v2 augments the investor's exposure to the deposited
|
|
tokens by leveraging USDC or SOL borrowing to finance the acquisition
|
|
of additional amounts of the deposited asset, which is designated as
|
|
"Collateral".
|
|
</li>
|
|
<li className="mb-3">
|
|
The magnitude of USDC or SOL leveraged and the volume of deposited
|
|
assets acquired are predicated on specific risk parameters, notably
|
|
the "Initialisation" asset weight of the deposited tokens.
|
|
The Mango DAO exercises governance over this critical parameter,
|
|
adjusting it in accordance with their risk management strategy.
|
|
</li>
|
|
<li className="mb-3">
|
|
When boosting JLP the collateral of deposited tokens is subject to a
|
|
fixed rate fee, which is imposed in direct proportion to the extent of
|
|
the collateral that is secured by outstanding liabilities. In the
|
|
context of liquidations, a distinct and typically lower value, known
|
|
as the "maintenance asset weight", comes into play,
|
|
representing the "weighted assets" threshold for triggering
|
|
liquidation.
|
|
</li>
|
|
<li className="mb-3">
|
|
The USDC and SOL borrow rates are dynamically adjusted based on the
|
|
total volume of USDC/SOL borrowed and deposited across the platform,
|
|
adhering to an exponential curve. This mechanism ensures that the
|
|
borrow rate increases with the aggregate borrowing activity,
|
|
influencing the cost of leveraging and the overall economic incentives
|
|
for borrowers and depositors alike. This rate adjustment strategy is
|
|
crucial for managing liquidity and risk on the platform.
|
|
</li>
|
|
<li className="mb-3">
|
|
The effectiveness of leveraging JLP and the associated USDC borrowing
|
|
rates are directly influenced by Boost! USDC, a distinct service on
|
|
the platform designed for USDC lending. The interplay between JLP
|
|
leverage and Boost USDC underscores the importance of understanding
|
|
the inherent risks of Boost USDC when utilizing JLP for investment
|
|
strategies. JLP and USDC are isolated from the LST pool.
|
|
</li>
|
|
<li className="mb-3">
|
|
A liquidation event is initiated when the combined value of the
|
|
borrowed USDC or SOL, along with the accumulated interest, surpasses
|
|
the "weighted assets" value. This mechanism ensures that
|
|
USDC depositors are prioritized for reimbursement in the event of a
|
|
market downturn.
|
|
</li>
|
|
<li className="mb-3">
|
|
The aforementioned risk parameters, such as the
|
|
"Initialisation" asset weight, play a crucial role in the
|
|
determination of both the borrowing capacity and the purchasing power
|
|
regarding the deposited assets, underlining the significance of the
|
|
Mango DAO's oversight.
|
|
</li>
|
|
<li className="mb-3">
|
|
Recommendation: Investors should be cognizant of the High Risk nature
|
|
of this product. The cryptocurrency markets are characterized by their
|
|
extreme volatility, which can lead to abrupt and unanticipated
|
|
liquidations, thereby posing a substantial risk to capital.
|
|
</li>
|
|
</ul>
|
|
<p className="mb-6">
|
|
For more information on Mango Boost, risks and charges please contact{' '}
|
|
<a
|
|
href="https://discord.gg/pV5mybZYY8"
|
|
target="_blank"
|
|
rel="noopener noreferrer"
|
|
>
|
|
https://discord.gg/pV5mybZYY8
|
|
</a>
|
|
</p>
|
|
<h3 className="mb-3">6. Interdependence with Boost USDC</h3>
|
|
<p className="mb-6">
|
|
The "Boost JLP" product intricately relies on the "Boost
|
|
USDC" , serving as a mechanism for deposits within the ecosystem.
|
|
Specifically, the Boost USDC product facilitates the deposit of USDC,
|
|
which is a critical component in enabling the leveraging features of
|
|
Boost JLP. This interdependence underscores a strategic approach to
|
|
liquidity management and leverage within the platform, where the
|
|
availability and conditions of USDC deposits directly influence the
|
|
operational dynamics of Boost JLP. As such, users engaging with Boost
|
|
JLP are implicitly interacting with the underlying mechanisms and risks
|
|
associated with Boost USDC.
|
|
</p>
|
|
<h3 className="mb-3">7. Charges</h3>
|
|
<p className="mb-3">
|
|
The charges are used to pay the costs of running the product, including
|
|
the costs of marketing, development and distributing it. These charges
|
|
reduce the potential growth of your leverage position, and increase the
|
|
likelihood of liquidation. At any point in time, Mango DAO can choose to
|
|
increase, decrease or remove fees:
|
|
</p>
|
|
<ul className="ml-6 list-outside list-disc">
|
|
<li className="mb-3">
|
|
Loan Origination Fee: This is a one-time fee applied to the USDC or
|
|
SOL borrowed, which increases the borrower's liabilities. It
|
|
typically ranges from 1 to 100 basis points.
|
|
</li>
|
|
<li className="mb-3">
|
|
Loan Fee Rate, This represents a percentage fee applied to the USDC or
|
|
SOL borrowed, also contributing to an increase in liabilities. The fee
|
|
rate falls within a 0-10 percent Annual Percentage Rate (APR).
|
|
</li>
|
|
<li className="mb-3">
|
|
Collateral Fee Rate, This is a percentage fee for boosting JLP,
|
|
assessed on the collateral deposited by the borrower. It fluctuates
|
|
based on the ratio of weighted liabilities to weighted collateral,
|
|
affecting the overall cost of borrowing.
|
|
</li>
|
|
<li className="mb-3">
|
|
Swap Fees, When positions are initiated by swapping USDC or SOL for a
|
|
derived token through the most efficient route, swap fees may be
|
|
incurred as part of the slippage. This fee affects the cost and
|
|
efficiency of the transaction.
|
|
</li>
|
|
</ul>
|
|
<h3 className="mb-3">8. JLP and LST Specific Risks</h3>
|
|
<h4 className="mb-2">8.1 Disclaimer on Jupiter Token Management</h4>
|
|
<p className="mb-3">
|
|
It is important for users to understand that the Boost platform does not
|
|
have any control over the management, performance, or operational
|
|
strategies of JLP or any of the LSTs. Users should conduct their own due
|
|
diligence and assess the risks involved when engaging with these tokens.
|
|
Boost! accepts no responsibility for any financial outcomes related to
|
|
the fluctuation in value, liquidity, or regulatory changes affecting
|
|
these tokens.
|
|
</p>
|
|
<h4 className="mb-2">
|
|
8.2 Risks Associated with Accepting JLP/LST Deposits
|
|
</h4>
|
|
<ul className="ml-6 list-outside list-disc">
|
|
<li className="mb-3">
|
|
Value Fluctuation Risk: The value of JLP/LSTs can be highly volatile,
|
|
affecting the collateral value of loans.
|
|
</li>
|
|
<li className="mb-3">
|
|
Smart Contract Risk: Potential vulnerabilities in the JLP/LST smart
|
|
contract could lead to loss of funds.
|
|
</li>
|
|
<li className="mb-3">
|
|
Market Risk: Changes in the overall crypto market could
|
|
disproportionately affect the JLP/LSTs liquidity pools, impacting the
|
|
tokens stability and value.
|
|
</li>
|
|
<li className="mb-3">
|
|
Regulatory Risk: Changes in regulatory landscapes may affect the
|
|
operation of liquidity pools and the usability of JLP/LSTs as
|
|
collateral.
|
|
</li>
|
|
</ul>
|
|
<h3 className="mb-3">9. General Risks</h3>
|
|
<p className="mb-3">
|
|
The below describes the potential risks faced by users of Boost!,
|
|
categorized into general risks, platform-specific risks, and market
|
|
operation risks
|
|
</p>
|
|
<ul className="ml-6 list-outside list-disc">
|
|
<li className="mb-3">
|
|
Legal and Taxation Risks: Users are responsible for understanding and
|
|
complying with the legal and tax implications of their actions within
|
|
Mango Markets.
|
|
</li>
|
|
<li className="mb-3">
|
|
Market Risks: Market prices are subject to rapid and unpredictable
|
|
changes. Historical trends do not guarantee future performance.
|
|
</li>
|
|
<li className="mb-3">
|
|
Unknown Risks: Additional, unspecified risks may exist, affecting
|
|
users' experiences and outcomes
|
|
</li>
|
|
</ul>
|
|
<h4 className="mb-2">9.1 Platform-Specific Risks</h4>
|
|
<p className="mb-3">
|
|
Solana Network Risks: Solana's architecture, designed for high
|
|
throughput and low transaction costs, faces challenges that can impact
|
|
users on the Boost platform. Key areas of concern include:
|
|
</p>
|
|
<ul className="ml-6 list-outside list-disc">
|
|
<li className="mb-3">
|
|
Wallet Loss: The decentralized nature of blockchain technology means
|
|
that wallet security is paramount. Users losing access to their
|
|
private keys will find themselves permanently unable to access their
|
|
funds on Boost, with no centralized authority to facilitate recovery.
|
|
</li>
|
|
<li className="mb-3">
|
|
Infrastructure Risks: The Solana network is not immune to downtimes or
|
|
degraded service quality. These can arise from various factors,
|
|
including network congestion, protocol upgrades, or malicious attacks.
|
|
During such downtimes, users may experience delayed transactions,
|
|
inability to access their funds, or temporary loss of platform
|
|
functionality. Extended outages could lead to significant disruption,
|
|
affecting trading strategies and access to assets.
|
|
</li>
|
|
</ul>
|
|
<h4 className="mb-2">9.2 Oracle Provider Risks</h4>
|
|
<p className="mb-3">
|
|
The use of oracle providers like Switchboard and Pyth introduce several
|
|
risks, necessitating a thorough understanding for informed
|
|
decision-making. Key points include:
|
|
</p>
|
|
<ul className="ml-6 list-outside list-disc">
|
|
<li className="mb-3">
|
|
Accuracy and Reliability: Oracle providers are responsible for
|
|
delivering accurate and timely data feeds. Any discrepancies or delays
|
|
in data can affect trades, liquidations, and the stability of the
|
|
market.
|
|
</li>
|
|
<li className="mb-3">
|
|
Customization and Community Governance: Switchboard is a
|
|
permissionless, customizable, multi-chain oracle network that relies
|
|
on community governance to curate and manage data feeds. While this
|
|
democratizes data provision, it also introduces variability in the
|
|
quality and reliability of the data, depending on community engagement
|
|
and oversight.
|
|
</li>
|
|
<li className="mb-3">
|
|
Technical Risks: The complexity of managing oracle queues, running
|
|
local oracles for testing, and integrating with smart contracts
|
|
introduces technical risks, including potential vulnerabilities or
|
|
misconfigurations that could be exploited.
|
|
</li>
|
|
</ul>
|
|
<h4 className="mb-2">9.3 Disclaimer on Oracle Management</h4>
|
|
<p className="mb-6">
|
|
It is crucial for platform users to acknowledge that Boost! does not
|
|
control or manage the oracle services provided by Switchboard, Pyth, or
|
|
any other third-party oracle providers. As such, we are not liable for
|
|
any discrepancies, inaccuracies, or failures of the oracle services. In
|
|
the event of data inaccuracies provided by these oracles, our platform
|
|
will proceed with liquidations or other contract executions based on the
|
|
received data, underscoring the importance of users' awareness of
|
|
these oracle provider risks.
|
|
</p>
|
|
<h3 className="mb-3">10. Boost! Specific Risks</h3>
|
|
<p className="mb-3">
|
|
The "Boost" products within the Mango Markets ecosystem,
|
|
designed to enhance user engagement through leveraged positions and
|
|
liquidity provision, carry their own set of specific risks. These risks
|
|
stem from operational complexities, market volatilities, and
|
|
dependencies on external services. Understanding these risks is crucial
|
|
for participants to navigate the platform effectively and mitigate
|
|
potential losses.
|
|
</p>
|
|
<ul className="ml-6 list-outside list-disc">
|
|
<li className="mb-3">
|
|
Operational Risks: Bugs or vulnerabilities in the deployed Boost
|
|
program or governance mechanisms could lead to incorrect behavior or
|
|
loss of funds.
|
|
</li>
|
|
<li className="mb-3">
|
|
Liquidation and Socialized Loss Risks: Market conditions can trigger
|
|
liquidations, potentially leading to cascading market impacts and
|
|
socialized losses under certain conditions.
|
|
</li>
|
|
<li className="mb-3">
|
|
Service and UI Risks: Reliance on external services and user
|
|
interfaces may introduce additional vulnerabilities, including data
|
|
accuracy and access issues.
|
|
</li>
|
|
</ul>
|
|
</div>
|
|
)
|
|
}
|
|
|
|
export default Risks
|