This Protocol Risk Factor Disclosure Statement (this "Disclosure Statement") aims to disclose, describe, and disclaim known or plausible risks related to the Phylax Protocol and smart contract system (together, the "Protocol") and its related technology ecosystem (the "Ecosystem"). It is intended to disclaim any legal obligations of Ecosystem participants ("Users" or "you") to one another and third parties, and to serve as a guide to a range of potential risks, uncertainties, and adverse/negative facts that may be associated with the Protocol, its use and results of its operation.
If any of these risks materialize, the Protocol or Ecosystem may be adversely impacted (up to an including catastrophic failure or total shutdown) and any blockchain tokens ("Tokens") related to or used in or by the Protocol may be irrevocably lost or destroyed or may otherwise lose some or all of their economic value.
It is highly recommended that you carefully review the Disclosure Statement before using the Protocol or engaging in activities related to the Ecosystem, whether directly or indirectly. Nevertheless, this Disclosure Statement might not be a comprehensive account of all relevant risks, uncertainties, or adverse/negative facts.
Users of the Protocol are solely responsible for all risks relating to their use of the Protocol or activities related to the Ecosystem. It is recommended that you consult legal, financial, tax and other professional advisors or experts before using the Protocol or engaging in activities related to the Ecosystem.
It is not recommended to use the Protocol unless you have prior experience with cryptographic tokens, blockchain-based software applications (including wallet software) and distributed ledger technology.
Beyond this Disclosure Statement, you should also be aware of and consider reviewing the following sources of information relevant to the Protocol and Ecosystem:
The Protocol and all other relevant technologies are being provided on an as-is basis, without representation, warranty, insurance or indemnity. All use of the Protocol and related Ecosystem is solely at your own risk.
Blockchain transactions are, under normal conditions, irreversible. Any tokens you deposit into Protocol-related smart contracts are subject to potential risk of permanent disablement, impairment, loss or forfeiture in the event of any exploits, bugs or malfunctions of the relevant smart contracts or the underlying blockchain itself, and no remedy will be available from any person due to any damages you may suffer in connection with your use of the Protocol or participation in the Ecosystem or use of any of the relevant technologies.
The technologies and assets involved in the Protocol and Ecosystem are highly experimental and risky, have uncertain and potentially volatile value, and should be directly evaluated by experts in blockchain technologies before use. Use them solely at your own risk. You must not rely on any articles, summaries or published code audits as an accurate description or evaluation of the Protocol, Ecosystem, or any other blockchain system, or for purposes of making any financial or other decision.
The Protocol is a permissionless security protocol and coordination framework intended to prevent user-defined pathological blockchain states for dApps running on third-party blockchain networks (each, a "Network"). The Protocol does not, however, control any Network; instead, Networks and their related elements may be controlled, governed, managed, or administered through a variety of mechanisms particular to each Network, including decentralized Token holder voting, centralized or permissioned controls, cryptographic multisignature security schemes, or other mechanisms.
The Protocol operates through an Assertion management layer composed of smart contract systems, which handle and process software logic related to the creation, amendment, and removal of Assertions. dApps are deployed and/or operated permissionlessly by "Submitters", who are natural or legal persons who define pathological blockchain states to operators across Credible Layer Networks.
Certain elements of the Protocol may be subject to modification or control by a cryptographic multisignature security scheme (each, a "Multisig"). Each Multisig, in turn, is administered by natural or legal persons who each hold a private key. It is possible for Multisig key holders to change certain parameters, addresses, or smart contracts of the Protocol or other related technologies. This discretion of Multisig key holders constitutes a material risk.
When you interact with a smart contract system, you are committing such Tokens to the sole and absolute control of the applicable software systems. During the time your Tokens are controlled by the applicable software system, you will lose all powers over and benefits with respect to such Tokens, other than the specific uses that such code allows you to make of such Tokens, if any.
Cryptoeconomic incentive structures are an inherent aspect of blockchain systems. Such incentive structures include the potential for destruction or forfeiture ("slashing") of Tokens in response to intentional or inadvertent failures to perform system functions within designated time periods.
Each Submitter has the ability to configure and deploy dApps and Assertions independently and permissionlessly. Tokens deposited in or used by dApps are subject to the exclusive control of their respective software-encoded rules and procedures. It might be possible for a Submitter to configure a dApp or Assertion in such a way as to permit the Submitter or other person to misappropriate or otherwise irrevocably lose or destroy Tokens.
The Ecosystem is intended to be community-governed. After the public launch of the Protocol, none of the persons who created all or any part of the Protocol or related smart contract system should be expected to have a material ongoing role in Protocol research, development or promotion.
Any smart contract parameter adjustments, network client updates, dApp or Rollup (re-)configurations, or other changes required to the Protocol or any related components may require approval of many different stakeholders, which comprise a dispersed group of persons that may be unable or unwilling to sufficiently coordinate to produce action.
All publications, articles, blogs, tweets, messages, posts, documents, statements, analyses and information relating to the Protocol or Ecosystem (collectively, "Ecosystem Content") are intended solely for general educational purposes regarding the software systems relating to the Protocol or Ecosystem and not as financial, legal, accounting, investment, or other advice or services.
The Ecosystem Content and the matters described in the Ecosystem Content have not been reviewed, approved, endorsed, opined on, licensed or registered by or with any regulator or other entity.
Like any other software, the Protocol and Ecosystem could be at risk of third-party malware, hacks, or cybersecurity breaches, including social engineering attacks directed at or through social media channels. In the event of such an attack, user assets may be misappropriated by theft or fraud. Users are responsible for securing and monitoring their own assets and confirming that the smart contracts or function calls thereof are consistent with user intentions.