Security & Risks
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.
Note that the yield optimization strategies that ACryptoS employ mean that funds are staked on external projects, thus incurring 3rd party risks. Where applicable, these are also described below.
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 project is in beta. Use at your own risk.
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. This risk applies both to ACryptoS and to the projects that ACryptoS have created vaults for. The risk mitigation actions described below apply only to mitigating the risk of exploit or malicious dev activity to ACyptoS.
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
- ACryptoS Dev Team can control all assets in Vaults behind a 48 hour timelock.
- ACryptoS Dev Team can mint ACS token behind a 48 hour timelock.
- ACryptoS Dev Team can mint ACSI token behind a 48 hour timelock.
- ACryptoS Dev Team can control all reward parameters of ACS Farms behind a 6 hour timelock.
- ACryptoS Dev Team can control all reward parameters of ACSI Farms behind a 6 hour timelock.
- ACryptoS Dev Team can control all fee parameters of StableSwap behind a 72 hour timelock. ACryptoS Dev Team can control destination of StableSwap admin fees.
- ACryptoS Dev Team cannot control assets in Farms.
- ACryptoS Dev Team cannot control assets in StableSwap.
This is the risk that flaws/bugs exist in smart contracts which can lead to a loss of funds either by accident or by malicious exploitation.
As ACryptoS interacts with other projects, there is smart contract risk both in the ACryptoS contracts and in all the contracts which ACryptoS interacts with.
ACryptoS has been audited by some of the most respected blockchain/smart contract auditing companies.
ACryptoS has created vaults which make use of selected lending protocols. With DeFi lending protocols there is the risk of insufficient liquidity meaning it may not be possible to withdrawal funds until liquidity increases. Low liquidity generally occurs when there is peak demand for an asset (such as for BNB during launchpad events). This is, in most cases, a temporary issue as the high borrowing costs will incentivize borrowers to repay and thus increase liquidity.
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.
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).
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.
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.
Smart contracts are forked from yearn.finance (Vault, Controller, Strategy), SushiSwap (MasterChef), Uniswap (Uni), Curve (StableSwap).