Risk Disclosures

01Sophisticated User Acknowledgment

The Divigent Protocol is technical infrastructure intended for use by users with sufficient knowledge and experience in decentralized finance, blockchain technology, and digital assets to understand and evaluate the risks involved. By using the Services, you represent and warrant that you are such a sophisticated user, that you have made your own assessment of the risks, and that you have consulted with your own independent legal, tax, accounting, and financial advisers to the extent you consider necessary.

02Smart Contract Risk

The Divigent Protocol consists of immutable smart contracts deployed on a public blockchain network. Smart contracts may contain bugs, vulnerabilities, design flaws, or unintended behaviors that could result in the loss, freezing, or theft of assets. Smart contracts may interact with other smart contracts in ways that are not anticipated by their developers, and the combined behavior of multiple contracts may produce unintended outcomes. The Divigent smart contracts have been audited by Oak Security, and the audit report is publicly available. An audit does not guarantee that the smart contracts are free of bugs or vulnerabilities. Audits are point-in-time assessments performed by humans and have inherent limitations. You bear all risk associated with the operation of the smart contracts.

03Third-Party Protocol Risk

The Divigent Protocol routes assets to and from third-party decentralized finance protocols (referred to as "Venues"), including Aave V3 and Morpho Prime at launch, and additional Venues that may be integrated over time. Each Venue is operated by an independent third party and is subject to its own risks, including smart contract risk, governance risk, oracle risk, liquidity risk, market risk, and operational risk. A failure, exploit, insolvency, governance attack, or other adverse event affecting any Venue could result in partial or total loss of assets routed to that Venue. Divigent does not control any Venue and is not responsible for the operation, security, performance, or solvency of any Venue.

You should independently review and understand the risks of each Venue before using the Services. Information about each Venue is available from its respective operator.

04Yield Variability and No Guaranteed Returns

Yields generated through the Divigent Protocol are variable and depend on market conditions, Venue-level supply and demand, governance decisions made by Venue operators, and other factors outside of Divigent's control. Past or current yields are not indicative of future yields. No yield, rate of return, or preservation of capital is guaranteed. Yields may decrease, become zero, or become negative. You may receive less than the amount you originally deposited, including in circumstances where a Venue suffers a loss, depegs, or otherwise fails to return assets in full.

05Stablecoin and Asset Risk

The Divigent Protocol routes stablecoins, including USDC, as part of its operation. Stablecoins are issued by independent third parties and are subject to risks including but not limited to:

• De-peg risk, where the market price of a stablecoin diverges from its intended reference price (e.g., one U.S. dollar);
• Issuer risk, including risks related to the solvency, reserves, banking relationships, and operations of the stablecoin issuer;
• Regulatory risk, including the risk that a stablecoin or its issuer is sanctioned, restricted, or subject to enforcement action by governmental authorities;
• Freeze and blacklist risk, including the ability of certain stablecoin issuers to freeze, block, or burn tokens held at specified addresses pursuant to law enforcement or operational discretion.

The receipt token issued by the Divigent Protocol, dvUSDC, is a non-transferable ERC-20 token that represents a proportional claim on routed assets. dvUSDC is not a stablecoin, is not redeemable for fiat currency, has no independent market, and should not be relied upon as a store of value.

06Oracle Risk

The Divigent Protocol may rely on price oracles, yield oracles, and other off-chain data feeds to perform its functions, including computing yields, sizing reserves, and determining routing. Oracles may report inaccurate, stale, or manipulated data. Oracle failures or manipulations could cause the Protocol to misroute assets, miscompute reserves, or otherwise behave in ways that result in losses. Divigent does not control any third-party oracle and is not responsible for oracle failures or manipulations.

07Adaptive Reserve and Liquidity Risk

The Divigent Protocol uses an adaptive reserve mechanism to balance yield generation with payment liquidity. The reserve is sized based on observed Wallet behavior. The reserve mechanism is not a guarantee of liquidity. In periods of unusual activity, network congestion, Venue illiquidity, or adverse market conditions, the Protocol may be unable to satisfy a withdrawal or payment request on the timescale you expect. Withdrawals from certain Venues may be subject to utilization-based limits, queues, cooldowns, or other constraints imposed by the Venue. You may experience delays, slippage, or partial fulfillment.

08Blockchain Network Risk

The Divigent Protocol is deployed on the Base network and may be deployed on additional blockchain networks over time. Blockchain networks are subject to risks including but not limited to network congestion, downtime, forks, reorganizations, validator or sequencer failures, governance changes, protocol upgrades, and 51% or other consensus-level attacks. Transactions submitted to a blockchain network may fail, be delayed, be reordered, or be censored. The Base network is operated by an independent third party. Divigent does not control and is not responsible for the operation of any blockchain network.

09Regulatory Risk

Digital assets and decentralized finance are subject to evolving and uncertain regulation in many jurisdictions. New laws, regulations, interpretations, or enforcement actions could materially adversely affect the operation, legality, value, or availability of the Services. Regulatory developments could require us to modify or discontinue the Services in some or all jurisdictions, restrict access to the Services for users in some or all jurisdictions, or impose registration, licensing, tax, reporting, or other obligations on Divigent, on Venues, or on you. Divigent makes no representation as to the regulatory treatment of the Services or of dvUSDC, USDC, or any other digital asset in any jurisdiction.

10Tax Considerations

The tax treatment of digital assets, of yield generation, and of receipt tokens such as dvUSDC is unsettled in many jurisdictions and may vary materially based on your residence, activities, and circumstances. Use of the Divigent Protocol may give rise to taxable events. You are solely responsible for determining and satisfying any tax obligations that arise from your use of the Services, including any obligations to report, withhold, or pay taxes. Divigent does not provide tax advice. You should consult a qualified tax adviser.

11Loss of Access and Self-Custody Risk

The Divigent Protocol is non-custodial. You are solely responsible for the security of your wallet, your private keys, your seed phrases, and any credentials used to access the Services. Loss of access to your wallet, theft of your keys, phishing attacks, social engineering, malware, hardware failures, or human error may result in the irrecoverable loss of your assets. Transactions on a blockchain network are irreversible. Divigent cannot recover lost keys, reverse transactions, or restore access to lost assets.

12Operational Risk

The Services depend on operational infrastructure that may be subject to failures, including but not limited to website downtime, SDK errors, RPC provider outages, indexer failures, key management incidents, employee error, vendor failures, and cybersecurity incidents. Operational failures could prevent you from accessing the Services, executing transactions, or receiving timely information. Divigent uses commercially reasonable efforts to operate reliably but does not warrant uninterrupted or error-free operation.

13Governance Risk

Divigent or its agents may, from time to time, update parameters of the Protocol, integrate or remove Venues, upgrade peripheral contracts, or take other operational actions. Changes to Protocol parameters or to Venue integrations may materially affect yields, risk exposure, or the operation of the Protocol. Venues themselves are subject to their own governance processes, including changes to interest rate models, collateral parameters, and risk parameters that may affect the value or availability of assets routed to those Venues.

14Market Risk and Volatility

Digital asset markets are highly volatile and may be subject to sharp and unpredictable price movements, liquidity shortages, and other adverse market conditions. Even stablecoin markets can experience significant volatility and dislocation. Adverse market conditions could affect yields, the value of assets routed by the Protocol, and your ability to withdraw assets on the timescale you expect.

15Audit Limitations

The audit performed by Oak Security covers the smart contracts as of the date of the audit and the scope agreed between Divigent and Oak Security. An audit is not a certification of correctness, security, or fitness for any purpose. Smart contracts may be modified, upgraded, or integrated with other contracts after the date of the audit in ways that are not covered by the audit. New vulnerabilities may be discovered after the audit. You should not rely solely on the audit when assessing the risks of using the Services.

16Forward-Looking Statements

Materials published by Divigent, including the website, documentation, social posts, and other communications, may contain forward-looking statements regarding the roadmap, integrations, performance, and operation of the Protocol. Forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied. Divigent undertakes no obligation to update forward-looking statements except as required by law.

17No Investment Advice; No Solicitation

Nothing in the Services, this Risk Disclosure, or any other Divigent communication constitutes investment, financial, legal, tax, accounting, or any other form of professional advice, nor is it an offer or solicitation to buy or sell any security, digital asset, or financial product. You should consult qualified independent professionals before making any decision to use the Services or to deploy capital.

18Acknowledgment

By using the Services, you acknowledge that:

• You have read and understood these Risk Disclosures and the Terms of Service;
• You understand that the risks described above are not exhaustive and that there may be other risks not described here;
• You assume all risks associated with your use of the Services and agree that Divigent has no liability for losses resulting from those risks except as expressly required by applicable law;
• You are using the Services voluntarily and at your own discretion, and you have the financial means and risk tolerance necessary to bear any losses that may result.

If you do not accept and assume these risks, you must not use the Services.