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Risk Disclosure

Detailed disclosures of protocol risks and user considerations. Nerite code has been audited several times by top firms.

Contract Risk​

Underlying Liquity contracts are audited and secure. Nerite Protocol is a fork of Liquity and inherits most of the same risks and security considerations, but with several updates.

Nerite protocol contracts are audited by Sherlock, Recon, and other independent auditors.

Reports are available here:

  • To be released
  • To be released

Centralization Risk​

Nerite Governance​

Nerite Protocol is designed to be as decentralized and immutable as possible. The only parameters in the protocol which can be updated or changed by Nerite governance are:

  1. Debt limits for each collateral type, which can be lowered at any time but only raised by a factor of 2x with a 7 day timelock.
  2. Where to direct 25% of protocol fees.

New collateral types can NOT be added by Nerite governance. USDN can NEVER be minted by Nerite governance. The percentage of fees that are directed to the stability pool can NOT be changed by Nerite governance.

Arbitrum Network​

Arbitrum is a decentralized network, but still relies on an emergency upgrade mechanism. For more information on this, see the L2 Beat tracker for Arbitrum decentralization.

Collaterals​

It is possible that some collateral tokens could be upgraded by respective DAOs or groups in the future. Conservative debt limits and over-collateralization ratios have been chosen to limit risks of this posing any issues.