☣️Risks Disclosure

These are Protocol and Interface risks every Pluto user must be aware of.

As you engage with Pluto, it’s essential to understand the associated risks. While we strive to provide a seamless and secure experience, certain risks are inherent to using experimental software and blockchain technology. This document outlines these risks to ensure you are fully informed.

Protocol Technical Disclosure

1. Oracle Risk

In its current stage, Pluto uses Pyth Price Feeds, which are a critical part of our DeFi infrastructure. While industry standards often use similar services, it’s important to recognize the potential risks. An oracle malfunction or incorrect data reporting can lead to cascading liquidations or incorrect protocol operations, resulting in potential losses.

2. De-Peg of Base Assets or Stablecoin Risks

Stablecoin issuers might impose restrictions or freeze accounts, which can disrupt protocol operations. Although Pluto strives to decentralize its collateral base, isolated lending limits risks to specific Earn Vault. However, de-pegging or restrictions can still pose significant risks.

3. Liquidations and Black-Swan Events

Liquidations may fail despite economic incentives. This can under-collateralize the protocol, risking LPs' capital. To mitigate this, Pluto's governance can implement token-backed backstops, increase reserve funds, and onboard more professional liquidators.

4. Risks of Parameters

The Parameters determines where Pluto users can deploy leverage. Incorrect liquidation thresholds or hacks can lead to Earn Vault insolvency. Ensuring the integrity of these lists is vital to maintaining protocol stability.

5. Earn Vault Withdrawal Risks

If the entire Earn Vault is borrowed, LPs may temporarily be unable to withdraw their capital, similar to scenarios in other protocols like Aave, Compound or Kamino. To mitigate this, Pluto adjusts interest rate parameters based on pool utilization, encouraging loan repayments and improving liquidity.

6. Wallet and Transaction Signing Issues

Connecting wallets and signing transactions can sometimes be challenging for users, affecting their ability to interact with the protocol smoothly.

7. Hacks and Software Issues

Exploits, malfunctions, and security breaches can disrupt protocol operations, potentially leading to partial or full loss of funds. Users must acknowledge and accept these risks.

8. Governance and Multisig

Until full on-chain governance is implemented, Pluto's decisions are executed via multisig. There is a timelock to prevent rogue transactions. However, proper multisig operation is essential to align with DAO governance and maintain user trust.

9. Use of Jupiter Aggregator

Pluto integrates with Jupiter Aggregator, connecting with various DEX protocols for asset swaps. While this offers flexibility and better rates, it introduces risks associated with each DEX protocol, including potential liquidity issues and slippage.

10. Continuous Improvement

Pluto is committed to enhancing security and functionality. Regular audits, community feedback, and updates aim to mitigate risks and improve user experience.

Interface Disclosure

1. Pluto is in Alpha

Pluto is currently in alpha stage, meaning it and all related software, including blockchain software and smart contracts, are experimental. Pluto is provided "as is" and "as available" without any warranty. This includes, but is not limited to, warranties that Pluto or any related software are free of defects, vulnerabilities, merchantable, fit for a particular purpose, or non-infringing.

2. Software Weaknesses

While we make reasonable efforts to ensure high-security standards, we cannot guarantee that Pluto or any related software are secure or free from phishing, malware, or other malicious attacks. There may be weaknesses, bugs, vulnerabilities, viruses, or other defects that could adversely affect Pluto’s operation or lead to losses and damages.

3. Blockchain Network Risks

Pluto operates on the Solana blockchain. Any malfunction, breakdown, or abandonment of Solana could adversely affect Pluto. Additionally, advances in cryptography or technology (e.g., quantum computing) could compromise the cryptographic consensus mechanisms underpinning the blockchain, potentially leading to significant risks.

4. Protocol Risks

Using Pluto involves interacting with complex, experimental protocols. Users must fully understand how the Protocol works and the potential consequences of transactions. Information derived from the Protocol, related software, and the underlying blockchain is automated and not verified, which means it might not always be accurate or timely.

Certain functions within the Protocol may be executed by third parties who might not act as expected, potentially resulting in partial or complete loss of digital assets.

5. Flawed Logic

The underlying logic of Pluto and related software may be flawed, leading to incorrect or unexpected smart-contract operations. Transactions might execute in violation of the smart contracts' intended logic, causing partial or complete loss of digital assets.

6. User Interface Confusion

Certain user interface elements or design decisions may be confusing or misleading, potentially resulting in unintended actions, transactions, or the connection of incorrect digital wallets, accounts, or networks.

7. Legal Uncertainty

Pluto's activities are subject to various laws and regulations in different jurisdictions. We might need to obtain licenses or other permissions in some regions. Regulatory actions or changes in laws could adversely affect Pluto or impair our ability to provide services.

8. Risk of Theft

Despite our efforts to secure transactions, there's no assurance against theft resulting from hacks, cyber-attacks, or vulnerabilities in Pluto or related software, the Solana blockchain, or other factors. Such events could lead to partial or complete theft or loss of digital assets.