In this section the major risks involved with investing funds in DeFi projects will be described along with the steps that ACryptoS have taken to mitigate these.
Be aware that investing in any DeFi project has risk. DeFi is relatively new and black swan events could occur that no-one has predicted. Only invest what you can afford to lose and always do your own research (DYOR) before committing funds to any project.
This is the risk that developers (or thieves who steal the development keys) could make changes in the code that would allow them to drain funds.
Removal of migrator function
The migrator function gives the owner of the Masterchef contract the ability to move all funds to another wallet, and thus steal user funds. This function has been removed from ACryptoS contracts
This means that there is a 48-hour time period between when code changes are published and when they are deployed. Therefore, if a developer wanted to implement malicious code there would be a 48-hour delay before the code is deployed, thus allowing users time to withdraw their funds.
Timelock monitor and community bot to monitor changes
The risk of liquidation is a feature of trading with leverage. Liquidation is a mechanism in which market sell orders are created to exit leveraged positions when the margin requirements are not met.
ACryptoS borrows and supplies the same asset so there is no liquidation risk from price.
The Venus vaults rebalance on every deposit, withdrawal and harvest.
Risk: StableSwap assets losing their pegs
When investing in stableswap pools, you are exposed to each of the assets in the pool and risk (impermanent) loss of funds if one of the coins loses its peg.
ACryptoS has split the StableSwap pools into a core pool and a number of metapools. The core pool is made up of BUSD, USDT, DAI and USDC.
The meta pools each contain one additional asset (e.g., VAI). The risk of an asset losing its peg in the meta pools is higher than the core pool (this is also compensated by a higher APY in the meta pools).
Risk: Impermanent loss
The risk of impermanent loss (IL) is present whenever you provide liquidity to a liquidity pool.
What is means is the (impermanent) loss of funds due to one of the assets in the pool being volatile in relation to the other.
To minimize the risk of IL you can choose to yield farm assets which have a high correlation (e.g., stable coin pairs) and avoid volatile pairs.
Note that the risk of IL is offset somewhat by the higher rewards offered for pairs that are more volatile. It is up to you as an investor to decide what strategy you are most comfortable with depending on your risk tolerance.
Additional notes on risks and safety:
Maturity of project
ACryptoS is one of the longest running DeFi projects on Binance Smart Chain (it was launched in November 2020).
Furthermore, the smart contracts used in ACryptoS are forked from yearn.finance (Vault, Controller, Strategy), SushiSwap (MasterChef), Uniswap (Uni) and Curve (StableSwap). These are some of the biggest and most well-established projects in DeFi.
ACSI.finance is a direct implementation of Balancer V2 (BAL) as well.
APRs/returns shown on the UI include the performance and the workers fees, but do not include the other fees (withdrawal, harvest), which will result in a negative return if you enter and exit a position quickly.
High returns/APRs almost certainly mean a high risk. The calculated APR/return depends on the underlying value of the token in the vault and the token(s) being farmed, including ACS and ACSI, which can be very volatile and/or inflationary.