Risk Disclosure
Last updated: November 26, 2025
1. Introduction
Trading digital assets and using decentralized financial protocols involve significant risks. By accessing Lumi Trade (“the Platform”), you acknowledge and accept the risks described in this Risk Disclosure.
This document does not cover all possible risks associated with blockchain and trading. You are solely responsible for evaluating your financial situation, risk tolerance, and understanding the implications of using the platform.
Lumi Trade does not provide financial, investment, legal, or tax advice.
2. Market Risk
Digital asset markets are highly volatile. You may lose part or all of your funds due to:
Rapid price fluctuations
Market manipulation
Low liquidity or thin order books
Unexpected market gaps
Liquidations in high-leverage positions
Prices may move substantially within seconds. You must be prepared for sudden and extreme price movements.
3. Leverage & Liquidation Risk
Lumi Trade supports leveraged trading (Perpetuals, ZFP, 1001x). Leverage significantly increases both potential gains and losses.
You may suffer:
Liquidation of your entire margin
Losses exceeding the amount deposited into a trade (depending on market conditions)
Inability to close positions during extreme volatility
Funding payments that reduce your equity over time
Using leverage requires advanced knowledge and experience.
4. On-Chain Execution Risk
All transactions on Lumi Trade occur on-chain, which introduces:
4.1 Gas Fee Volatility
Gas fees may spike unexpectedly, causing:
Failed transactions
Delayed execution
High costs to open or close positions
4.2 MEV (Miner Extractable Value) Exposure
Transactions may be affected by:
Front-running
Sandwich attacks
Priority fees affecting execution sequence
Lumi Trade employs several MEV protection strategies, but no method is 100% guaranteed.
4.3 Network Congestion
Blockchains may experience delays or outages, resulting in:
Inability to execute or cancel trades
Delayed oracle price updates
Liquidations during network lag
5. Oracle Risk
Lumi Trade uses third-party oracle providers such as:
Pyth
Chainlink
Internal price feeds (depending on product mode)
Oracles may fail or be manipulated due to:
Delayed updates
Incorrect price feeds
Flash crashes
Data disruptions from third-party sources
Incorrect oracle data may directly impact:
Liquidations
Trade execution
PnL
Mark price calculations
6. Smart Contract Risk
Although Lumi Trade undergoes audits and security reviews, smart contracts may still contain:
Undiscovered bugs
Logic flaws
Vulnerabilities
External dependencies at risk
A contract exploit may lead to:
Permanent loss of user assets
Loss of open positions
Incorrect settlement or PnL
System instability
No audit can fully eliminate smart contract risk.
7. Liquidity Risk
Lumi Trade relies on available liquidity from:
Market makers
Liquidity pools
On-chain liquidity vaults (future)
Third-party routing sources
Insufficient liquidity may result in:
Large slippage
Partial fills
Inability to close positions timely
Deviation between mark price and execution price
Zero-Fee Perpetual (ZFP) also relies on ecosystem liquidity conditions.
8. System Risk
System risks include:
Downtime of frontend or backend components
DNS or routing failures
Unexpected bugs or updates
Sudden protocol changes
Pausing or halting of certain features
While smart contracts are on-chain, supporting systems (UI, API, RPC nodes) may experience temporary outages.
9. Governance & Protocol Change Risk
Lumi Trade may introduce upgrades, patches, or parameter changes that affect:
Funding rates
Margin requirements
Fee structures
Allowed leverage
Oracle configurations
Reward systems
These changes may occur with or without prior notice.
10. Regulatory Risk
The legal status of decentralized exchanges varies across jurisdictions. Regulatory changes may:
Restrict your access to the platform
Require geofencing or compliance adjustments
Impact the availability of certain products
You are fully responsible for complying with local laws and regulations.
11. Third-Party Integration Risk
Lumi Trade interacts with external services including:
Wallet providers (MetaMask, OKX, Trust Wallet…)
Privy email authentication
RPC node providers
Third-party bridges
Oracle providers
Failures or compromises of external systems may affect your ability to trade or access assets.
12. Reward and Airdrop Risk
Lumi Trade may offer:
Points
Seasons rewards (Spectra → Nova → Aurora → Pulsar → Luminary → Cosmos)
Referral bonuses
Trading incentives
These rewards:
Are not guaranteed
May change or be discontinued
May be affected by participation rules, anti-Sybil checks, or abuse detection
Are not financial products
May not have monetary value
13. Token Risk ($LUMI, $USDL if applicable)
Lumi Trade's tokens may involve:
Volatility
Liquidity variations
Speculative activity
Smart contract risks
Regulatory uncertainties
Holding platform tokens does not represent equity, ownership, or guaranteed returns.
14. No Custodial Responsibility
Lumi Trade never holds user funds. You are fully responsible for:
Safeguarding your private keys
Using secure wallets
Protecting seed phrases
Confirming transaction details before signing
Lost access to a wallet cannot be recovered.
15. Acknowledgement
By using Lumi Trade, you acknowledge that:
You understand the risks described in this Risk Disclosure
You accept the possibility of total loss of funds
You use the platform entirely at your own risk
Lumi Trade, its contributors, partners, and affiliates are not liable for your losses
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