Mangrove
Mangrove
Mangrove
  • START HERE
    • What is Mangrove?
      • Smart offers
      • Bounty
      • Makers, Takers, Keepers
        • Makers
        • Takers
        • Keepers
    • Why Mangrove?
    • Who is the Mangrove dApp for?
    • Audits
    • FAQ
    • Glossary
    • Terms & Conditions
  • Strategies
    • Kandel
      • What is Kandel?
      • How does Kandel Work?
        • Step-by-step visual explanation
        • Parameters
        • Choosing Kandel parameters
        • Published Liquidity
        • More on failing offers
      • Potential risks
  • DAPP GUIDE
    • Swap
    • Trade
      • How to make an order
        • Market Order
        • Limit Order
        • Amplified Order
        • More on order types
      • Approvals
      • Minimum Volume
      • How to Track and Manage Orders
    • Earn
    • Rewards
    • Bridge
    • Wrap
  • MGV INCENTIVES
    • Fee Rewards
      • How the programs Work
      • Current programs
    • Vault LP programs
      • How the Programs Work
      • Current programs
      • Earning rewards
      • Example
      • Previous programs
    • MS2 Program (closed)
      • How Rewards Are Calculated
        • Reward Rate ρ
        • Takers Rewards
        • Adjusted Volume for Makers
        • How to Maximize Your Score
      • MGV Token Allocation per User Type
        • Specific Allocation for Kandel users and vault managers
        • Community Contributors
        • Incentives with a custom strategy
      • Epochs and Updates
    • MS1 Program (closed)
      • Intro
      • Trading Points
      • Boost
      • Referral Points
      • Community Points
      • Parameters
      • Technical Insights
      • MS1 FAQ
      • Disclaimer
  • Governance
    • General Governance
      • Key Stakeholders
        • Token Holders
          • Builders
        • Builders
        • Pods
      • Guardians
      • Governance Process
        • Initial Discussions
        • Proposals
        • Voting
        • Execution
    • Councils
      • Responsibilities
      • Elections
      • Budgets
    • Guides and resources
      • How to vote on a governance proposal
      • How to delegate my voting power
      • How to access the Builders’ directory
      • How to access the Pods’ directory
      • Snapshot configuration & membership
      • Links and adresses
  • QUICK LINKS
    • Whitepaper
    • Website
    • Feedback
    • Blog
    • GitHub
    • X
    • Discord
    • Telegram
    • Deployment adresses
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On this page
  • Economical risks
  • Impermanent Loss
  • Smart contract and technological risks
  1. Strategies
  2. Kandel

Potential risks

Kandel strategy is subject to some risks that should be taken into consideration. By using Kandel, you acknowledge (i) having the necessary knowledge and understanding of the blockchain technology and the tokens, and (ii) comprehended the risks associated with blockchain-based software systems and tokens, as described below and in the disclaimer.

Economical risks

As a user of the Kandel strategy, you understand that using Kandel can be affected by economic risks, including but not limited to:

  • Partial or total loss of the tokens used;

  • Partial or total loss of the value of the tokens used;

  • Market extreme volatility;

  • Insolvency of a third-party platform or company;

  • Absence of liquidity and impossible resale on markets of the tokens.

Impermanent Loss

Kandel is a passive market-maker where profit is generated from the spread. An example of impermanent loss on an ETH/USDC pair would be as follows:

  1. If the current price of ETH/USDC pair moves up, asks will be consumed.

  2. If the price keeps going up and crosses the max price range value, Kandel strategy will be left only with active bid offers on the ETH/USDC market.

  3. It is likely that no one would be interested in taking these bids since they would not match the current price (you would be offering too little USDC for ETH, considering the new current price). This is what we call impermanent loss - your strategy stops generating profit from the spread.

Smart contract and technological risks

You understands that even though the strategy has been implemented by an experienced team of researchers and developers, the use of Kandel can be affected by smart contract and technological risks, including but not limited to:

  • Security error or failure allowing and/or resulting in hacking and stealing of user, third-party platform and/or website/app data;

  • Stealing or loss of the user external wallet private key or his access to the third-party platform;

  • Risks associated with blockchains used for the strategy, including but not limited to due to successful attacks from hackers or other criminal groups or organizations or countries, including but not limited to denial of service attacks, Sybil attacks, spoofing, smurfing malware attacks, consensus-based attacks, or phishing, or other new methods that may or may not be known;

  • Lack of transparency in crypto asset management and markets;

That being said, please note that the Kandel strategy has been thoroughly audited by ChainSecurity.

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Last updated 23 days ago