Portals Risks

The following list of risks is an indication of risks based on best knowledge but doesn’t claim to be comprehensive. Users are encouraged to do their own research on the various parts of the Portals system.

Smart Contract Risks

  1. Possum Portals is a novel protocol, and despite multiple rounds of security audits, bugs may still be present.

  2. Possum Portals are a set of immutable contracts. If there is a vulnerability, manual migration by the user is required.

  3. Portals are built on top of third-party protocols (HMX and Vaultka). Bugs and vulnerabilities could be present in these protocols and affect user funds.

Centralisation Risks

  1. Some staking assets pose risks related to centralized control such as blacklisting or custodial risk (e.g. USDC/.e, WBTC). Other centralization risks include the upgradeability of staked assets (HLP) or the underlying protocols (HMX & Vaultka) which could break composability with Portals after an incompatible upgrade. Managers of these centralized assets and protocols could make interactions with Portals or the underlying protocols impossible which could lead to total loss of user funds.

  2. Possum Labs has no influence on decisions by these centralized managers. Portals cannot actively adapt to changes in underlying protocols or assets due to its immutability.

Market Risks

  1. Staked assets may experience unusual volatility and drop in price rapidly while the user has limited access to them. This may cause substantial financial loss.

  2. So called “stable coins” used in staking can experience unexpected volatility during de-peg events.

  3. PSM may experience heightened volatility which could make repayment of the time-debt impractical. In this event, users may need to wait until the end of their lock duration to access all of their capital. A similar situation may occur if PSM liquidity drops to impractical levels to perform swaps.

  4. The underlying protocols (HMX and Vaultka) could experience unexpected losses during their regular operation, such as bad debt or unusual trader profitability. We encourage users to familiarize themselves deeply with the economic risks of the staked assets and underlying protocols.

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