Risk
Understand the key risks of trading options and providing liquidity on CallPut, including market risk, volatility exposure, and protocol-specific considerations.
Smart Contract Risk
CallPut operates through smart contracts deployed on public blockchains.
While audited and designed with security best practices, smart contracts carry inherent risks, including bugs or unforeseen vulnerabilities.
Layer-2 Network Risk
CallPut operates on Layer-2 networks to improve scalability and reduce costs.
Risks may arise from:
Network congestion
Sequencer downtime
Bridging mechanisms
These risks are external to the protocol.
Market Liquidity Risk
Options markets are sensitive to volatility and liquidity conditions.
During extreme market events, spreads may widen and execution costs may increase as part of risk management mechanisms.
Oracle Manipulation Risk
Synthetic pricing relies on external data sources.
Although safeguards and redundancy are implemented, multiple oracle failure or data delays may impact pricing accuracy in rare scenarios.
Risk Mitigation Measures
CallPut mitigates risk through:
Fully collateralized option issuance
Spread-based option structures
Dynamic risk premiums
Multi-source & high-frequency pricing inputs
These mechanisms are designed to reduce systemic risk and protect both traders and liquidity providers.
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