Risk Disclosures

1. General Risk Statement

Engaging with cryptocurrency services and digital assets carries inherent risks. The value of digital assets can be highly volatile, and you could lose a substantial portion or all of the value of the assets you swap. You should carefully consider your financial situation, risk tolerance, and investment objectives before using Velox or any cryptocurrency platform.

The risks described in this document are not exhaustive. Additional risks that we have not anticipated, or that are not material as of the date of this disclosure, may also affect your use of the platform. Past performance of any digital asset is not indicative of future results.

2. Market & Price Volatility Risk

The market for digital assets, including USDT and TRX, is subject to extreme price volatility. The exchange rate between USDT and TRX, or the USD value of either asset, can fluctuate significantly within very short periods. Factors influencing volatility include but are not limited to:

• Global macroeconomic conditions and monetary policy decisions.
• Regulatory announcements, enforcement actions, or legislative developments affecting the cryptocurrency industry.
• On-chain events such as network upgrades, forks, exploits, or congestion on the TRON blockchain.
• Market sentiment, trading volume shifts, and liquidity provider behavior.
• USDT de-pegging risk — while USDT targets a 1:1 peg with the US Dollar, historical de-pegging events have occurred.

Velox provides a rate lock of approximately 15 seconds. During periods of extreme volatility, the rate may change significantly between the time you request a quote and the time you confirm. The platform will require re-confirmation if the rate deviates beyond slippage tolerance. You bear the risk of adverse price movements occurring during this window.

3. Liquidity & Slippage Risk

Velox sources liquidity from on-chain reserves and external market makers. During periods of low liquidity, large swap orders may experience price impact where the effective exchange rate is less favorable than the displayed rate. The platform's default slippage tolerance of 0.5% is designed to protect you from excessive price deviation. In the event that liquidity is insufficient to complete your swap at an acceptable rate, the transaction may fail and your assets will remain in your wallet.

Liquidity conditions can change rapidly. A pair that is liquid at the time you request a quote may become illiquid before your transaction is confirmed on-chain. Velox does not guarantee that sufficient liquidity will be available at all times for any given swap size.

4. Counterparty & Smart Contract Risk

Velox swaps execute through smart contracts deployed on the TRON blockchain. These contracts are designed to enforce atomic settlement: all transfers complete successfully, or the entire transaction reverts. However, smart contract technology carries inherent risk:

• Code Vulnerabilities. Despite undergoing third-party security audits, Velox's smart contracts may contain undiscovered bugs, flaws, or vulnerabilities that could be exploited by malicious actors. An exploit could result in partial or total loss of funds.
• Oracle Risk. The platform's exchange rate feeds depend on oracles and external price sources. Oracle manipulation, inaccurate data feeds, or oracle downtime could affect swap pricing and settlement.
• Gas Reserve Risk. While Velox maintains a gas reserve to cover transaction fees, the reserve could theoretically be depleted during extreme network conditions, leading to delayed or failed transactions.
• Contract Upgrade Risk. If smart contracts are upgradeable, future upgrades could introduce new risks or alter the behavior of the platform in ways you may not anticipate.

5. Regulatory & Legal Risk

The regulatory landscape for digital assets, decentralized protocols, and swap services is evolving rapidly and varies significantly across jurisdictions. Regulatory actions could materially affect your ability to use Velox or the value of the assets involved:

• Regulatory bodies may determine that certain activities on Velox constitute regulated financial services, requiring licensing or registration.
• New laws or regulations could restrict or prohibit the use of swap protocols, non-custodial services, or specific digital assets in your jurisdiction.
• Law enforcement actions, asset freezes, or sanctions designations could affect counterparties, liquidity providers, or blockchain addresses that interact with the platform.
• Tax treatment of cryptocurrency swaps varies by jurisdiction. You are solely responsible for reporting and paying any taxes arising from your use of the platform.

Velox does not operate as a registered exchange, broker-dealer, money transmitter, or financial institution in any jurisdiction. As regulatory frameworks solidify, the platform's operational model may need to adapt, potentially affecting service availability or functionality.

6. Technology & Network Risk

The Velox platform depends on several layers of technology infrastructure, each of which introduces its own risk factors:

7. Risks Within Your Control

Certain risks are directly within your control and can be mitigated through careful practice:

• Private Key Security. Loss, theft, or compromise of your private keys or seed phrase will result in permanent inaccessibility of your funds. Velox cannot recover lost keys, reverse unauthorized transactions, or restore access to a compromised wallet.
• Transaction Errors. Entering an incorrect amount, selecting the wrong token pair, or confirming a transaction without verifying the displayed rate may result in an unfavorable swap. Velox displays all details before confirmation — it is your responsibility to review them carefully.
• Phishing Awareness. Bookmark the official Velox URL. Verify smart contract addresses independently on TronScan before signing transactions. Never share your private keys, seed phrase, or wallet credentials.

8. Acknowledgment & Acceptance of Risk

By connecting your wallet and executing a transaction on the Velox platform, you expressly acknowledge and accept that:

• You have read and understood this Risk Disclosure Statement in its entirety.
• You understand that digital asset transactions are irreversible once confirmed on the blockchain.
• You accept the risk of total loss of the digital assets involved in your swap.
• You are transacting based on your own independent assessment and not in reliance on any statement, representation, or content provided by Velox.
• Velox is not acting as your financial adviser, broker, or fiduciary in any capacity.
• You are solely responsible for compliance with all laws applicable to your use of the platform, including tax obligations.

If you do not understand or do not accept any of the risks described in this document, you should not use the Velox platform. For questions, contact legal@velox.fi.