FIVA
  • FIVA Overview
    • Introduction
    • Problem & Solution
    • Importance to the Space
  • FIVA Mechanics
    • Glossary
    • Understanding the Basics
    • Protocol Components
      • SY (Standardized Yield Token)
      • Yield Stripping
      • PT (Principal Token)
      • YT (Yield Token)
      • FIVA's AMM Design
    • Fee Structure
    • P&L in FIVA
    • FAQ
  • FIVA Manual
    • Getting Started
    • Use Cases
    • PT - Fixing Yield
    • YT - Leveraged Yield Farming
    • LP - Liquidity Provision
    • Mint - Get Liquidity from Future Yields Today
    • Arbitrage Opportunities
  • FIVA Strategies
    • EVAA
      • PT - Fixed USDT Yield
      • YT - EVAA Point Farming with up to 250x Multiplier
      • LP - Enhancing Your EVAA Returns
      • Mint - Get you Future USDT Yield now
    • Ethena
      • PT - Fixed USDe Returns
      • YT - Farming Ethena Airdrop with 60x Multiplier
      • LP - Multiple Income Streams
    • Storm Trade
      • PT - Fixed Yield on SLP
      • YT - Efficient Reward & Yield Farming on Storm
      • LP - Maximizing Returns from Storm Vaults
      • Max Supply - Determination Framework for Storm SLP Market
    • Tonstakers
      • LP - Enhancing Your Tonstakers Returns
  • FIVA Rewards
    • The Points System
    • Genesis Pass Collection
  • FIVA Pioneers Campaign
  • Security
    • Risks
      • Smart Contract Risk
      • Underlying Protocol Risk
      • Oracle Risk
      • PT Risks
        • Market Risk
        • Liquidity Risk
      • YT Risks
        • Market Risk
        • Implied Leverage
        • Zero Value at Maturity
        • Liquidity Risk
      • LP Risks
        • Impermanent Loss
        • Market Risk
        • Additional Considerations for LPs
    • Audit Report - Tonbit
  • Developers
    • SDK
    • npm package
    • Integrating Fixed-Rate Staking
      • SDK - Guide for Fixed Staking
      • API - Pools Metrics Endpoint
  • Links
    • Website
    • Telegram App
    • Telegram Channel
    • Telegram Community
    • X (Twitter)
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On this page
  • Nature of Underlying Protocol Risk
  • FIVA's Approach to Managing Underlying Protocol Risk
  • User Considerations
  1. Security
  2. Risks

Underlying Protocol Risk

Nature of Underlying Protocol Risk

FIVA functions as a yield tokenization layer that works with existing DeFi protocols in the TON ecosystem. This means FIVA's security and operational effectiveness are intrinsically linked to the security and performance of these underlying protocols. When you interact with FIVA, you are indirectly exposed to risks associated with these underlying protocols - Storm Trade, EVAA, Tonstakers.

Underlying protocol risks can manifest in various ways:

  • Smart contract vulnerabilities in the underlying protocol could affect assets being tokenized by FIVA

  • Governance decisions by the underlying protocol teams could alter yield mechanisms

  • Technical upgrades or parameter changes might affect compatibility or performance

  • Liquidity fluctuations in underlying protocols could influence yield stability

These dependencies create a compound risk profile, where issues in any underlying protocol could potentially cascade to affect FIVA token holders, even if FIVA's own contracts are functioning properly.

FIVA's Approach to Managing Underlying Protocol Risk

FIVA takes a methodical approach to managing underlying protocol risk through several key strategies:

Selective Integration Process:

  • We prioritize working with proven DeFi protocols in the TON ecosystem

  • We favor protocols with multiple security audits to ensure code quality

  • We give preference to protocols with open-source codebases that allow for community review

  • We assess the track record and technical expertise of the teams behind each protocol

Collaborative Technical Relationships:

  • We establish direct working relationships with the technical teams of underlying protocols

  • These relationships enable rapid communication if issues arise

  • Collaborative troubleshooting ensures faster resolution of any integration challenges

  • Technical cooperation allows for coordination on upgrades and parameter changes

Continuous Monitoring and Assessment:

  • Ongoing monitoring of all integrated protocols for potential issues

  • Analysis of on-chain metrics to identify unusual patterns

User Considerations

Even with FIVA's careful approach to protocol selection and monitoring, users should be aware that:

  • The interconnected nature of DeFi creates dependencies that cannot be completely isolated

  • New or innovative protocols might offer attractive yields but could carry higher underlying risk

  • The relative newness of the TON DeFi ecosystem means many protocols have limited operational history

  • Yield tokenization adds a layer of abstraction that requires users to understand multiple protocols

We strongly encourage users to:

  1. Research the underlying protocols that FIVA integrates with

  2. Understand how yield is generated at the base level

  3. Consider how risks might compound across protocol layers

  4. Follow updates from both FIVA and the underlying protocols

  5. Diversify their positions across different yield sources when possible

FIVA is committed to building on the strongest foundations available in the TON ecosystem and to providing transparent information about our integrations and their inherent risks.

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Last updated 22 days ago