We strive to make lending as safe and transparent as possible, however, it’s important to consider factors that may influence whether a particular lending option is appropriate for you.
Smart contract risks: Defi platforms like AAVE, have inherent risks associated with smart contracts. These contracts can be exploited or hacked by a malicious actor
Counterparty risks: If you use a centralized lending platform, you may be exposed to counterparty risk. This is the risk that the other party in the transaction may not fulfill their obligations and default on the contract.
Protocol security risks: The collateral for DAI may include loans and receivables from third parties, which implies a collateral risk. There is also a risk of unknown bugs in the protocol or smart contract.
Keep in mind that this is not a comprehensive list of all potential risks associated with lending.
