For users of Neko Network, when you read the contents below, please consider all MAZE as NEKO. They are identical.
Users of Maze Protocol can be exposed to various risks. Please read through the contents below before sending your assets to the system.
Risk to Suppliers
If you want to avoid the suppliers' risks, but still wish to share the protocol reward, you can supply your funds in Reserve.
Liquidity of Funds
Your assets supplied in Funding may not be able to be retrieved in time when the asset pool is highly occupied. The delay of withdrawal may cause collateral effects such as price volatility risks.
Loss of Funds
It is possible that the assets in Funding went damaged if the liquidators did not liquidate in time when a large market surge occurred.
Risk to Borrowers
Loss of Collaterals
If your account reaches the unhealthy level (your collateral assets' price drops or your borrowed assets' price rises too much), your collaterals will be exposed to liquidators. Part of your collaterals will be taken by the liquidators and your corresponding debt will be repaid, in order to recover your health factor back to over 1. There is also an additional part of your collaterals taken as the liquidation penalty. See the risk parameters here.
To avoid being liquidated, it is better to keep your Borrowed Balance lower than Borrow Credit.
Smart Contract Risks
Maze Protocol is an experimental software running on the blockchain. No matter how many tests and audits are passed, the smart contracts may still have leaks, bugs and are likely to be attacked.
Our codes will be audited by at least one professional audit team to minimize the technical risks.