The use of RAMP Protocol doesn't come without risks. Before making any deposits, it is best to research and understand the risks involved.
Smart Contract Audits
Third Party Protocol Risks
Price and Liquidation Risks
Transaction Slippages or Loss of Stability Peg
RAMP smart contracts are audited at various stages, in part or in full, by multiple auditors including Beosin, Hacken and Arcadier.
While we do our best to eliminate all the possible risks, DeFi is an industry where events that no one predicted can occur. Security audits do not eliminate risks completely. Please do not deposit your life savings, or assets you can’t afford to lose, into RAMP protocol.
Assets deposited into RAMP smart contracts are redeployed via asset management strategies into other protocols to earn additional yield.
This means that the safety of the asset deposits are subject to the security of the third party protocol where the assets are deployed into.
The asset management strategies currently deploy users' assets into the following protocols:
Users who do not wish be exposed to a specific third party protocol should avoid using vaults that are redeploying to that protocol.
Asset deposits are subject to systematic risks, which means that price fluctuations and market changes will affect the market value and prices of assets deposited into RAMP protocol.
To protect the fundamental value of rUSD, users are required to use their assets as collateral when minting rUSD. The rUSD minted by a user is therefore backed up by the market value of the assets used as collateral.
If the prices of the collateralized assets dip below the liquidation price, the assets will be liquidated by the protocol to repay the rUSD minted. Users who minted rUSD are therefore at risk of liquidation if they do not repay their minted rUSD prior to reductions in asset values.
While RAMP has mechanisms to manage rUSD peg to other fiat-backed stablecoins, it does not mean that rUSD will always and consistently be holding this stable peg. In particular, until the rUSD liquidity pools become sufficiently deep, there may be transaction slippages, especially in large size transactions.
If rUSD goes significantly down below the peg of 1.0 and never returns to the peg, it effectively means that liquidity providers for rUSD pairs hold almost all their liquidity in this currency.