Staking Risks

What are the risks of staking HBAR with Stader?

Using HBARX involves certain inherent risks, as with any form of digital asset investment. While Stader goes to great lengths to ensure the security of your staked assets, it's essential for users to be aware of these risks and make informed decisions when staking their assets. Here are some of the main risks that users should be aware of:

• Smart Contract Security Risk Like all DeFi protocols, Stader's HBARX protocol is governed by smart contracts, which could potentially contain vulnerabilities or bugs. To minimize this risk, Stader ensures that its smart contracts are open-sourced and rigorously audited.

• Native Chain - Technical Risk The Hedera network is still a technology under active development. While a large number of developers and researchers are working to ensure their stability and security, there's no guarantee that they are entirely free of errors. Vulnerabilities inherent to the Hedera network could potentially affect the staking process and the value of HBARX.

• Wallet and Downstream Apps Wallets and third-party applications may be required to access staking. Users should independently evaluate the security of wallets and other third-party apps. Please note that Stader does not take responsibility for the security of the wallets or third-party applications used to access the staking solution.

• Exchange Rate Manipulation The HBARX-to-HBAR exchange rate ensures users receive the correct amount of HBARX (when staking HBAR) and HBAR (when unstaking HBARX). If this rate is manipulated by malicious actors, HBARX holders could potentially withdraw significantly more HBAR by unstaking through Stader or mint HBARX for far less HBAR on the Stader dApp.

• Slashing Risk Hedera network validators can face penalties, including the potential loss of all staked funds, if they fail to fulfill their duties. Stader, however, tries its best to mitigate this risk by staking across multiple reputable validators with diverse setups.