Risks

This document outlines the key risks users and partners should understand before using the Inkryptus platform.

Price volatility

Cryptocurrency assets are subject to rapid and significant price fluctuations. The value of INKY, USDT, BTC, ETH, CAKE, and all other digital assets can increase or decrease substantially within short periods.

• Users may lose part or all of their invested capital.
• Platform-quoted prices may change between quote generation and transaction execution.
• External market conditions (exchange listings, regulatory announcements, macroeconomic factors) can cause sharp price movements.

Mitigation: The platform supports stablecoin holdings (USDT) for users who want reduced volatility exposure. The in-app Swap executes at the quoted price with no slippage for the user. Users can diversify across multiple assets.

Staking risks

APR projections are not guaranteed

Key factors affecting APR:

• Daily yield is variable: The contract mints up to a ceiling each day (15,000 INKY today, 20,000 INKY at the most), and that emission is split among the participants of each pool. As staked volume increases, the per-participant daily yield decreases proportionally.
• Emission parameters are configurable: The ceilings are parameters in the staking contract: 10,000 INKY a day for the common pools, plus the Arena Staking Pool's own ceiling on top of it. The platform retains the ability to adjust these values through contract upgrades. See Emission for the formula behind them.
• External conditions change: Regulatory changes, market conditions, or platform decisions may affect staking product availability.

Only actual daily rewards claimed or harvested constitute effective return. Claimed rewards are taxable in most jurisdictions and subject to the platform's 25% performance fee.

Mitigation: The app displays real-time APR based on current conditions, not projected future performance. Users can harvest rewards at any time and are not locked into claimed returns. The emission ceiling (20,000 INKY a day at the most) limits supply expansion.

Custodial risk

Inkryptus runs a simplified custody model: each account has its own individual on-chain address, and that wallet is a smart contract Inkryptus operates through a multisig arrangement, so no seed phrase and no private key is ever handed to the user. That convenience is also a dependency, and it introduces custodial risk:

• Security depends on platform: Inkryptus operates the wallet contracts, and moving funds out of one takes more than one signature under a multisig arrangement.
• Key management: There is no seed phrase for the user to keep, and no way to move funds outside the platform's own flows. Account recovery is handled through the platform's support process.
• Regulatory exposure: In some jurisdictions, custodial platforms face additional regulatory requirements or restrictions.
• Operational dependency: Users depend on the platform's continued operation and good standing.

The platform employs multisig architecture and security best practices, but this architecture is not immune to all threats. See Architecture and Security & Verification for details on the security model.

Mitigation: Multisig wallet requires multiple signatures for fund movements. KYC-tiered withdrawal limits reduce exposure to unauthorized access. Email-based 2FA protects sensitive operations. Zero security incidents since platform launch (2020).

Smart contract risk

All staking and on-chain operations depend on smart contract code. While Inkryptus contracts are public and verifiable on BscScan:

• Code review by public: The contracts are available for review by security researchers and the crypto community.
• Unforeseen bugs are possible: Even well-reviewed code may contain logical errors, edge cases, or vulnerabilities that manifest under unexpected conditions.
• BNB Smart Chain risk: Smart contracts depend on BNB Smart Chain infrastructure. Issues with the blockchain itself (consensus failures, security incidents) could affect Inkryptus contracts.

Users should review the contract code on BscScan before staking or transacting significant amounts. See Contracts for all contract addresses.

Mitigation: All contracts use OpenZeppelin standards. Source code is verified on BscScan and publicly readable. Third-party scanners (GoPlus, Token Sniffer) show no honeypot, no hidden fees, and no malicious functions. Clean incident record since contract deploy (May 2023). See Security & Verification for full scanner results.

Liquidity risk

INKY maintains liquidity on PancakeSwap (v2 and v3) in the INKY/USDT pair, but liquidity depth is variable:

• Pool depth changes: Liquidity providers can add or withdraw liquidity at any time, affecting pool depth.
• Slippage on large trades: Large buy or sell orders relative to pool depth will experience slippage, resulting in worse execution prices.
• No guarantee of liquidity: The platform does not guarantee perpetual liquidity at any level. If liquidity is removed, trading may become difficult or impossible.
• Trading fees apply: A trade on PancakeSwap pays that pool's own swap fee, plus gas costs. Inside Inkryptus the swap costs the flat 3 USDT transaction fee and the platform handles the rest.

See Liquidity for current pool depth and AMM pricing mechanics.

Mitigation: In-app Swap executes at the quoted price with a fixed 3 USDT fee, shielding users from on-chain slippage. Pool depth is publicly verifiable on GeckoTerminal and DEX Screener. The Products Vault holds the vast majority of LP tokens, maintaining pool stability.

Regulatory risk

Cryptocurrency regulation varies significantly by jurisdiction and is rapidly evolving:

• Regulatory changes: New regulations or enforcement actions by government agencies in any jurisdiction could restrict platform access, require changes to operations, or impact the value of INKY.
• Classification uncertainty: Jurisdictions differ on whether INKY and staking rewards constitute securities, commodities, or other regulated assets.
• Geographic restrictions: The platform may be unavailable in certain jurisdictions due to regulatory requirements.
• Tax implications: Users are responsible for understanding and complying with tax obligations in their jurisdiction.

Inkryptus is not responsible for regulatory changes or user tax obligations. Users should seek independent legal and tax advice.

Mitigation: KYC verification is available for users who need compliance documentation. Account statements can be exported for tax reporting via Profile > Account > Statement.

Emission risk

The staking contract's emission schedule is governed by a set of parameters: the rate applied to what is staked, the common pools' ceiling of 10,000 INKY a day, and the Arena Staking Pool's own ceiling, which mints on top of it (5,000 INKY up to 2,500,000 INKY staked in that pool, 10,000 INKY above it). Together they put the contract at 15,000 INKY a day today, and 20,000 INKY at the most. These parameters may be adjusted over time to maintain the health of the ecosystem, and a change to any of them would affect the realized APR for all stakers.

The INKY token has a hard cap on total supply (200,000,000 INKY). As circulating supply approaches this cap, emission will slow or stop entirely, regardless of staked volume.

Not investment advice

Before using the platform, users should conduct independent due diligence, consult with financial advisors, and review the platform's Terms of Use.

Where each risk sits

The same seven risks, by how hard each one hits and how often it comes up. Both columns are our own reading of the platform as it stands, not a measurement, and neither is a forecast.

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