Risks

Mighty Finance is built to provide a seamless, efficient, and optimized DeFi experience, but like any decentralized financial platform, there are inherent risks. While we take extensive measures to enhance security and reduce vulnerabilities, users must understand and manage the risks involved in leveraged yield farming, lending, and liquidity provision.

Smart Contract & Security Risks

Mighty Finance operates through smart contracts, which are immutable once deployed. While rigorously audited, they remain vulnerable to exploits, coding errors, and unforeseen vulnerabilities.
The platform interacts with external protocols (DEXes, lending pools, oracles), which carry their own risks. We do not control these third-party integrations and cannot guarantee their security.
Hacks, exploits, and cyberattacks remain a persistent risk in DeFi, and users should only engage with funds they can afford to lose.

Liquidation Risks

Using leverage magnifies potential returns but also increases the risk of liquidation. If a position’s debt ratio surpasses the liquidation threshold, it will be forcefully closed.
Liquidations may not always occur immediately or at an optimal price, especially in times of network congestion or extreme market volatility.
If liquidation bots fail to execute on time, bad debt may occur, and remaining collateral could be insufficient to cover the borrowed amount.

Price Impact & Impermanent Loss Risks

Price impact can affect execution when entering or exiting positions, especially in lower liquidity pools. Large trades may cause slippage, leading to unfavorable price execution.
Impermanent loss is an inherent risk for liquidity providers when token prices shift significantly within a pool. This loss may become permanent in volatile market conditions.
Concentrated liquidity pools generally amplify the impact of price fluctuations, making impermanent loss more pronounced.

Network Congestion & Oracle Risks

Blockchain congestion can lead to transaction delays, failed executions, or unexpected price movements, impacting trade outcomes.
Mighty Finance relies on third-party price oracles (e.g., Chainlink, Pyth) to determine real-time market prices. Any oracle disruptions, inaccuracies, or manipulations could cause unexpected liquidations or mispriced trades.

Lending & Liquidity Pool Risks

High utilization rates in lending pools may delay withdrawals until borrowers repay their debts.
If a lending pool reaches 100% utilization, borrowers may face higher interest rates, while lenders may be temporarily unable to retrieve their deposited funds.
If liquidations fail to execute in time, bad debt can accumulate, leading to potential risks for liquidity providers and lenders.

Wallet & Security Risks

Mighty Finance is non-custodial—we do not control user assets or private keys. Users must take full responsibility for securing their wallets.
The platform supports multiple wallet providers, but if a wallet service experiences a security breach, Mighty Finance cannot recover lost funds.
Users should always verify wallet permissions before signing transactions and avoid interacting with unauthorized platforms.

Regulatory & Compliance Risks

The regulatory landscape for DeFi is constantly evolving. Future legal changes could impact platform operations or restrict access to certain jurisdictions.
Users must confirm they are legally allowed to use DeFi services in their respective regions.
Mighty Finance does not operate in prohibited jurisdictions such as the United States, China, North Korea, Iran, Syria, Cuba, and OFAC-sanctioned regions. Users from these locations must not engage with the platform.

User Responsibility

DeFi is inherently risky. Users must conduct their own research (DYOR) and understand how leverage, impermanent loss, and liquidations function before engaging.
Invest only what you can afford to lose. Losses in DeFi can be irreversible.
Mighty Finance does not guarantee profits, protection from liquidation, or immunity from market volatility.

Mighty Finance is designed to empower users with financial flexibility and advanced DeFi strategies, but success depends on understanding and managing risk effectively.

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Last updated 1 month ago

Smart Contract & Security Risks

Mighty Finance operates through smart contracts, which are immutable once deployed. While rigorously audited, they remain vulnerable to exploits, coding errors, and unforeseen vulnerabilities.

The platform interacts with external protocols (DEXes, lending pools, oracles), which carry their own risks. We do not control these third-party integrations and cannot guarantee their security.

Hacks, exploits, and cyberattacks remain a persistent risk in DeFi, and users should only engage with funds they can afford to lose.

Liquidation Risks

Using leverage magnifies potential returns but also increases the risk of liquidation. If a position’s debt ratio surpasses the liquidation threshold, it will be forcefully closed.

Liquidations may not always occur immediately or at an optimal price, especially in times of network congestion or extreme market volatility.

If liquidation bots fail to execute on time, bad debt may occur, and remaining collateral could be insufficient to cover the borrowed amount.

Price Impact & Impermanent Loss Risks

Price impact can affect execution when entering or exiting positions, especially in lower liquidity pools. Large trades may cause slippage, leading to unfavorable price execution.

Impermanent loss is an inherent risk for liquidity providers when token prices shift significantly within a pool. This loss may become permanent in volatile market conditions.

Concentrated liquidity pools generally amplify the impact of price fluctuations, making impermanent loss more pronounced.

Network Congestion & Oracle Risks

Blockchain congestion can lead to transaction delays, failed executions, or unexpected price movements, impacting trade outcomes.

Mighty Finance relies on third-party price oracles (e.g., Chainlink, Pyth) to determine real-time market prices. Any oracle disruptions, inaccuracies, or manipulations could cause unexpected liquidations or mispriced trades.

Lending & Liquidity Pool Risks

High utilization rates in lending pools may delay withdrawals until borrowers repay their debts.

If a lending pool reaches 100% utilization, borrowers may face higher interest rates, while lenders may be temporarily unable to retrieve their deposited funds.

If liquidations fail to execute in time, bad debt can accumulate, leading to potential risks for liquidity providers and lenders.

Wallet & Security Risks

Mighty Finance is non-custodial—we do not control user assets or private keys. Users must take full responsibility for securing their wallets.

The platform supports multiple wallet providers, but if a wallet service experiences a security breach, Mighty Finance cannot recover lost funds.

Users should always verify wallet permissions before signing transactions and avoid interacting with unauthorized platforms.

Regulatory & Compliance Risks

The regulatory landscape for DeFi is constantly evolving. Future legal changes could impact platform operations or restrict access to certain jurisdictions.

Users must confirm they are legally allowed to use DeFi services in their respective regions.

Mighty Finance does not operate in prohibited jurisdictions such as the United States, China, North Korea, Iran, Syria, Cuba, and OFAC-sanctioned regions. Users from these locations must not engage with the platform.

User Responsibility

DeFi is inherently risky. Users must conduct their own research (DYOR) and understand how leverage, impermanent loss, and liquidations function before engaging.

Invest only what you can afford to lose. Losses in DeFi can be irreversible.

Mighty Finance does not guarantee profits, protection from liquidation, or immunity from market volatility.

Mighty Finance is designed to empower users with financial flexibility and advanced DeFi strategies, but success depends on understanding and managing risk effectively.