> ## Documentation Index
> Fetch the complete documentation index at: https://docs.blackhaven.xyz/llms.txt
> Use this file to discover all available pages before exploring further.

# Risks

<Info>
  All community feedback is welcome. If you believe any risk has not been adequately surfaced, please reach out to our contributors.
</Info>

### Smart Contract Risk

Like all DeFi protocols, Blackhaven is built on smart contracts. While these contracts are designed to be robust and secure, there is always a risk of vulnerabilities, bugs, or exploits that could result in a partial or total loss of user funds.

**Mitigation:**

* **Audits:** The codebase will undergo multiple audits from independent security firms before launch. All audit reports will be made public.
* **Bug Bounty Program:** A bug bounty program incentivizes security researchers to find and report vulnerabilities responsibly.
* **Time-Locked Contracts:** Key administrative functions and contract upgrades are subject to a time-lock, giving users a window to exit if they disagree with a proposed change.

### RBT Backing Risk

RBT is a reserve-backed token. A portion of each bond deposit is retained as protocol revenue, so RBT is not issued at a strict 1:1 ratio against deposited assets. Backing levels and market dynamics can cause the trading price and backing ratio to deviate accordingly.

**Mitigation:**

* **Verifiable On-Chain Reserves:** The reserves are fully transparent and verifiable on-chain. Users can always see the exact assets backing RBT.
* **Protocol-Owned Liquidity (POL):** Through bonding, Blackhaven builds permanent liquidity positions in the RBT-USDM pool.
* **Backing Arbitrage Module (BAM):** When RBT trades below NAV, the reserves buy and burn RBT per the BAM's on-chain rules.

### Oracle Risk

The protocol aims to use oracles for pricing data. If oracles are manipulated or provide inaccurate data, it could lead to incorrect calculations of RBT backing.

**Mitigation:**

* **Multiple Oracle Providers:** For critical functions, the protocol aims to use multiple oracle providers as redundancy.