Risks

Using KIMP involves substantial risk, including the loss of all collateral posted or deposited. Read this page in full before trading Kimp Contracts or depositing into the Kimp Pool. The list is not exhaustive.

Smart contract risk#

The contracts may contain bugs that lead to loss or freezing of funds. Audits are scheduled before mainnet but cannot guarantee correctness. Core contracts are non-upgradeable, so a bug cannot be patched in place. It can only be mitigated by pausing and migrating to a new version.

Oracle and index risk#

The Kimp Index is published by a set of staked reporters. The finalized value is the median of valid reports with a quorum of 5. If enough reporters collude or fail, the index can be wrong or stale. Bonds, slashing, disputes, the 300 bps circuit guard and the settlement TWAP reduce this risk but do not remove it. If no update is finalized for 5 minutes, markets enter reduce-only mode.

Source-exchange risk#

The index depends on Upbit for the KRW price and on Binance, Coinbase and OKX for the global price. These venues can halt trading, report erroneous prices, suffer outages or change their data access. A halt on Upbit freezes the index and makes the market reduce-only. USDT is treated at par with USD; a USDT deviation distorts the global price.

FX risk#

The index converts KRW to USD using a mid-market USDKRW reference. FX data can gap on weekends, holidays or during outages. The last valid mid is carried for up to 72 hours. During a carry, the index may diverge from the premium traders observe.

Liquidity and LP risk#

The Kimp Pool is the counterparty to every contract. LPs take the other side of net trader P&L and can lose principal. If pool utilization after a withdrawal would exceed 80%, withdrawals are queued to the next weekly settlement. kLP value moves with trader P&L, not only with fees.

Liquidation risk#

Positions are liquidated when equity falls to the maintenance margin, which is 25% of initial margin. Liquidation costs 0.50% of notional. The premium can move quickly, and at higher leverage a small move can trigger liquidation. Liquidation depends on keepers; delays are possible.

Bridged USDC risk#

USDC on GIWA is bridged. Its value depends on the bridge and on the issuer. A bridge failure could make bridged USDC worthless or illiquid on GIWA.

Stablecoin depeg risk#

Collateral and NAV are accounted in USD. If a stablecoin used as collateral loses its peg, positions and the pool are affected. ETH collateral is valued with a 10% haircut, but a sharp ETH drawdown can still reduce margin.

Chain and sequencer risk#

GIWA is an OP Stack chain with a single sequencer. The sequencer can go offline, delay or reorder transactions. Flashblocks preconfirmations are an early view, not finality. If the sequencer is unavailable, OP Stack chains support forced inclusion of transactions through Ethereum L1, with a delay; see docs.giwa.io for GIWA's behavior. During an outage, you may be unable to add margin or close in time.

Regulatory risk#

Laws on derivatives and digital assets differ by jurisdiction and change over time. Access may be restricted, and the protocol or the interface may be affected by regulatory action. You are responsible for complying with your local law. Restricted persons may not use the interface. See Restricted Persons.

Token risk#

$KIMP has not launched. No contract address exists. Anyone offering $KIMP before launch is running a scam. After launch, the token may have no value, and its price may be volatile.