4.8 Risks and Boundaries

Price de-peg & liquidity exhaustion: If extreme market sentiment or external shocks push FUSD’s price toward its upper or lower limits, the platform can initiate emergency measures, including temporarily raising transaction fees, reducing hedging ratios, or pausing certain high-risk operations to safeguard the treasury’s stability.

Smart contract & cross-chain risk: Even though core logic runs within a TEE, smart contracts might still face vulnerabilities or oracle attacks. The platform will engage external security teams for regular audits and offer a bug bounty program to the community.

Regulatory & compliance risk: Regulations for digital assets and gaming applications vary by region. Users should understand their local laws before participating. The platform will enable or restrict certain services on a jurisdiction-by-jurisdiction basis to remain compliant.

User behavior risk: Abuse such as bot usage, collusion, or cheating can undermine the ecosystem’s fairness. The platform combines on-chain proofs, AI risk control models, and manual review to detect abnormal behavior. Accounts may be frozen, transactions reverted, and legal action taken against violators when necessary.

Soft Rate-Limiter: Instead of manual intervention, the system uses a soft rate-limiter mechanism. When prices approach the peg’s boundaries or volatility becomes abnormal, the system automatically adjusts the treasury’s hedging strategy, increases slippage fees, lengthens the TWAP window, and reduces transaction execution speed. This absorbs short-term speculative shocks and helps maintain overall system stability.