Custodian & Counterparty Risk

Using Tydro can involve a custodian and other counterparties. These introduce risks that sit outside the protocol's code

Custodian risk

Where assets are held through Kraken qualified custody, the holder relies on that custodian. A custodian can suffer operational failure, become insolvent, freeze or restrict access to assets, or be subject to legal or regulatory action that affects those assets. Qualified custody brings regulated standards and controls to how assets are held, while leaving counterparty exposure to the custodian itself. See Qualified Custody.

Holding assets with a custodian means access to those assets depends on the custodian's solvency, operations, and legal standing.

Counterparty risk in products

Some products involve other parties. A vault depends on its curator and allocator to act within their mandate. A term facility depends on the parties to it. A first-loss provider depends on the capital being present and sufficient. Each relationship is a counterparty exposure in addition to the protocol. See Lending Vaults and Vault Curation.

Insurance is conditional and may not apply

Where insurance coverage is arranged, it is subject to its own terms, scope, limits, and exclusions, and it may not cover a given loss or be in force for a given position. Do not treat insurance as a backstop for a position unless the coverage is confirmed to apply to it. See Insurance Coverage.

Regulatory risk

The legal and regulatory treatment of on-chain lending, custody, and the assets involved can change. Regulatory action can affect access to the protocol, the status of an asset, or a counterparty the position depends on.