Risk & Security

There are several risks when interacting with Orange Vaults.

Financial Risks

  • Orange takes a short position with a lending protocol by paying interest.

  • Impermanent loss(IL) and Loss vs Rebalance(LVR) are the major risks when providing a concentrated liquidity position to Uniswap V3

  • Orange could experience a loss if IL, LVR, or interest for the hedge is higher than the earned fees

  • Orange’s ETH/USDC position might get exposed to ETH more if there is a sudden change in price and thus might result in the position's IL. In this case, Orange tries to maintain delta neutrality by rebalancing.

Smart Contract Risks

  • Orange takes security seriously. Our smart contracts have been audited by WatchPug. However, smart contracts still have risks, and we encourage users to only deposit funds they can afford to lose.

  • Orange vaults interact with multiple protocols and are exposed to other smart contracts' security standards.

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