Investing in the Crypto Earn Pocket can potentially generate attractive returns through Annual Percentage Yield (APY) rewards. However, it is essential to understand that staking also involves risks, which can lead to the partial or complete loss of your staked crypto. We strongly recommend reading the following information carefully before using Crypto Earn Pocket.
1. Protocol risk
Staking depends on the underlying blockchain protocols, which can be susceptible to technical errors, bugs, security vulnerabilities, or unforeseen events. Any issues with the protocol could lead to a partial or total loss of your staked crypto and earned rewards. While Vivid Digital S.r.l. carefully selects staking-eligible assets to mitigate these risks, we cannot fully eliminate them, nor does it control the protocols or their security.
2. Slashing risk
Slashing is a penalty imposed by blockchain protocols when certain rules are violated, such as validator downtime, incorrect voting, or dual staking. This penalty can result in the loss of some or all of your staked crypto. Vivid Digital S.r.l. works with trusted third-party providers that implement safeguards against slashing and, in some cases, offer insurance against such penalties. However, slashing remains a risk that cannot be entirely avoided.
3. Liquidity risk
Certain blockchain protocols enforce restrictions like activation periods, lock-up periods, and withdrawal delays, during which your staked crypto cannot be accessed. Although Vivid Digital S.r.l. strives to offer flexibility for staking and unstaking, there may be exceptional situations where temporary limits are imposed on withdrawals or unstaking orders. This could delay your ability to sell or withdraw your crypto. If such limits are applied, Vivid Digital S.r.l. will notify you as soon as possible.
4. Risk of fluctuating rewards
Rewards (APY) are determined by blockchain protocols and can change over time. Vivid Digital S.r.l. has no control over the reward rates set by these protocols. The APY shown in the app reflects current estimates but may decrease without prior notice, impacting your potential earnings.
5. Use of third-party staking providers
To facilitate staking services, Vivid Digital S.r.l. partners with carefully selected third-party providers. Your funds will be transferred to these providers, who are required to keep your crypto in segregated accounts. However, there is a risk that your funds could be lost due to the provider’s insolvency, errors, or other unforeseen issues. While Vivid Digital S.r.l. takes precautions to minimise this risk, it cannot be entirely eliminated.
6. General risks associated with crypto assets
In addition to staking-specific risks, regular risks associated with crypto currencies also apply to the Crypto Earn Pocket. These include risks associated with market volatility, price fluctuations, and potential loss of value. Crypto assets are highly volatile and can experience rapid changes in value, which could result in financial loss. Even if you are earning rewards, the overall value of your investment may decrease due to market fluctuations.
Understanding these risks is crucial before using the Crypto Earn Pocket. We encourage you to make informed decisions and conduct your own research.