Key points
- You can lose all of the money you put in. With leverage, you can lose it within minutes.
- Nobody can recover a lost recovery phrase or reverse a confirmed transaction, including 0x4.
- Sprites are experimental and can trade badly.
- Only use funds you can afford to lose, and never act on a post, stream or ranking without your own judgment.
01Before you begin
This disclosure describes the principal risks of holding, transferring and trading digital assets through 0x4. It forms part of our Terms of Service. It cannot list every risk, and new risks appear as technology and regulation change. Read it carefully, and consider whether these activities suit your knowledge, experience and financial position.
02Market risk
Digital asset prices are highly volatile and can fall sharply or to zero, at any hour and without warning. Many tokens, especially newly launched ones, have thin liquidity: a single large order can move the price, you may be unable to sell at the price shown, and slippage can be significant. Charts, rankings and historical returns describe the past and do not predict the future.
03Leverage and liquidation
Perpetual contracts use leverage, which magnifies both gains and losses. At high leverage, a price move of a few percent against you can trigger liquidation, closing your position and taking the margin behind it. Positions held on cross margin share one balance, so a loss on one position can liquidate the others. Liquidation is executed automatically by the protocol and does not wait for you. Funding payments are exchanged between long and short positions while you hold them and can erode a position over time. Fast markets, delayed prices or network congestion can cause liquidation at worse prices than expected.
04Keys and custody
A self-custodial wallet gives you full control and full responsibility. If you lose your recovery phrase and your device, your assets are lost permanently. If someone else obtains your recovery phrase or private keys, or gains control of your unlocked device, they can move your assets instantly. Malware, compromised devices, cloud backups of screenshots and careless storage are common causes of loss.
05Scams and phishing
Fraudsters impersonate support staff, well-known people and projects, including 0x4. They build fake websites and apps, and they request signatures that hand over control of your tokens. 0x4 will never ask for your recovery phrase or private keys, and will never ask you to send funds to verify your account. Before you sign, check the website, the contract and what the signature allows. Be wary of unsolicited messages, giveaways and offers that promise guaranteed returns.
06Tokens you may encounter
Anyone can create a token. Tokens shown in 0x4, including trending tokens and tokens mentioned by other users, have not been reviewed by us. Some are designed to deceive: they copy the name of a real project, restrict selling, hide fees or allow their creators to mint or withdraw liquidity. Security labels and warnings in the Services are imperfect and may miss problems or flag tokens incorrectly.
07Smart contracts and protocols
Swaps, perpetuals and gifts rely on smart contracts and decentralized protocols. Code can contain undiscovered vulnerabilities, upgrades and governance decisions can change how a protocol behaves, and attacks can drain funds. Price oracles can report stale or manipulated values, which may cause unexpected execution or liquidation. Neither 0x4 nor the protocols guarantee that funds lost in such events will be recovered.
08Bridges and cross-chain transfers
Moving assets between blockchains relies on bridges and intermediaries, which add their own technical and counterparty risk and have historically been frequent targets of attack. Cross-chain transfers can be delayed, can arrive as a different token than expected, or can fail and require manual recovery.
09Stablecoins
Stablecoins aim to hold a fixed value but can lose their peg, sometimes abruptly. Their issuers may freeze or block addresses, and their reserves may be insufficient or unavailable. Energy is purchased with USDT, so the risks of that stablecoin apply to the funds you deposit.
10Networks and fees
Blockchain networks can congest, halt, fork or reorganize. Network fees can rise sharply, and a transaction can fail while still consuming fees. Transactions waiting to be confirmed may be front-run or executed at a different price. Confirmed transactions cannot be reversed. Over the longer term, advances in computing, including quantum computing, may weaken the cryptography that blockchains rely on.
11Sprites and automation
Sprites make decisions through an experimental simulation of a biological brain, and their conversation is generated by AI models. Neither has been proven to trade profitably. A sprite can misread the market, trade repeatedly into losses or behave in ways its owner did not anticipate. With automatic trading enabled, trades are executed while you may not be watching. Keep limits small, review activity often, and revoke the permission whenever you are unsure. Rankings of sprites reflect past activity only.
12Energy and gifts
USDT deposited for energy cannot be withdrawn or refunded, and energy has no value outside gifting in the Services. If the Services become unavailable, unused energy may become unusable. Gifts depend on a smart contract and on scheduled settlement, which may be delayed by network conditions or contract issues. Only acquire energy you intend to spend.
13Social content
Posts, chats, streams and rankings are created by users who may be wrong, biased or paid to promote an asset, and they may hold the assets they discuss. Following others’ trades or calls exposes you to their mistakes and their motives. Popularity is not evidence of quality.
14Legal, regulatory and tax
Laws governing digital assets differ between countries and change often. A new law, enforcement action or sanction can restrict or end access to a feature, a token or the Services in your location. Some activities may be unlawful where you are, and it is your responsibility to check. Transactions may create tax obligations, and records on public blockchains are permanent.
15No protection scheme
Digital assets held in your wallet are not bank deposits. They are not covered by deposit insurance, investor compensation schemes or similar public protections. If assets are lost, stolen or devalued, there is generally no fund or authority that will make you whole.
Questions about these risks: support@420.meme