Terms & Conditions

General Terms and Conditions of Use

1. Preamble

These General Terms and Conditions of Use (the “Terms”) govern access to and use of the Platform accessible at https://usefelix.xyz/, including the User Interface.

The Platform provides information about the fundamentals of the decentralised non-custodial, over-collateralised lending and borrowing protocol, consisting of open-source self-executing Smart Contracts that are deployed on Third-Party Blockchain Network.

These Terms constitute a legally binding agreement between the User and the Platform Operator. The Platform Operator may update or amend these Terms from time to time, as outlined in Section 13.

If the Users don't agree with these Terms, the Users may not use the Platform and should not visit the Site or otherwise engage with the Platform.

These Terms include an arbitration clause outlined below. The Users agree that any disputes related to the Platform will be resolved through mandatory binding arbitration. By agreeing, the Users waive the right to a jury trial and the ability to participate in a class-action lawsuit.

1.2 Professional Use Only

The Platform is intended for use exclusively by professional and knowledgeable Users acting in a business or professional capacity. It is not intended for use by individual consumers or companies which are not acting in their capacity as a professional. Accordingly, consumer protection laws do not apply to the use of the Platform.

By accepting these Terms, the User certifies that they have sufficient expertise to understand and assess the legal and financial issues related to the use of the Platform. Users accessing the Platform represent and warrant that they are acting in a business or professional capacity. The User acknowledges and agrees that it is their responsibility to ensure their own competence, and if not, they must seek the advice of a qualified professional before proceeding with the use of the proposed services on the Platform.

1.3 Nature of the Platform

The Platform operates as an automated, decentralised, over-collateralised lending and borrowing protocol through autonomous Smart Contracts deployed on a Third-Party Blockchain Network.

The Platform Operator provides access to the Platform via the User Interface but does not:

1. Issue feUSD or any other Utility Tokens.

2. Custody User funds or private keys.

3. Intervene in Token Transactions conducted through the Smart Contracts.

4. Guarantee the stability, value, or performance of feUSD or any other digital assets.

All Token Transactions on the Platform are executed directly between Users through the Smart Contracts. The Platform Operator has no control over these transactions once they are submitted to the Third-Party Blockchain Network.

1.4 Registration and Wallet Connection

To access the Platform, Users must connect a compatible blockchain wallet through the User Interface. Users need to be aware that their compatible blockchain wallet is provided by a third-party entity and is generally governed by separate terms and conditions set by the respective third-party service provider.

By connecting their wallet, Users acknowledge and agree to the following:

1. Acceptance of Terms: The act of connecting a wallet constitutes acceptance of these Terms including full awareness and understanding of associated risks.

2. Understanding of Risk Disclosure: Users confirm that they have read and understood the Risk Disclosure outlined in Section 9.

3. Self-Custody Responsibility: Users are responsible for securing their blockchain wallets, private keys, and recovery phrases. The Platform Operator does not control the wallets, manage or recover lost credentials.

1.5 No Financial, Legal, or Tax Advice

The Platform Operator does not provide financial, legal, or tax advice. All information provided through the User Interface is for informational purposes only and should not be construed as advice of any kind.

2. Definitions

For the purpose of these Terms, the following capitalised terms shall have the meanings set forth below. These definitions apply consistently throughout this document, regardless of whether the terms are used in a singular or plural form.

2.1 Arbitral Award

“Arbitral Award” refers to the final and binding decision issued by an arbitrator in accordance with the Arbitration Rules of the Cayman International Mediation and Arbitration Centre Ltd (CIMAC), as outlined in Section 12.

2.2 Applicable Laws

“Applicable Laws” refers to the laws of the Cayman Islands and legal requirements that govern the use of the Platform, including but not limited to financial regulations, anti-money laundering (AML) laws, tax obligations, and data protection laws.

2.3 Collateral

“Collateral” refers to the digital assets (ETH, Lido ETH (wstETH) and Rocket Pool ETH (rETH)) deposited by Users into the Smart Contracts to secure their debt positions and mint feUSD.

2.4 Collateralisation Ratios

“Collateralisation Ratios” refers to the predetermined threshold set in the Smart Contracts, which specifies the maximum permissible value that Users must not exceed, as surpassing it would result in the Liquidation or Redemption of their position. Each User is entitled to access the Collateralisation Ratios provided on the Platform. The Platform Operator reserves the right to modify the Collateralisation Ratios.

2.5 Consultants and Experts

“Consultants and Experts” refers to third-party professionals who are engaged by a party to a dispute to provide technical or subject-matter expertise during arbitration proceedings or in connection with the use of the Platform.

2.6 feUSD

“feUSD” is a protocol-generated stablecoin pegged to the U.S. dollar. It serves as the Unit of Account within the Platform to facilitate transactions between Users. feUSD is created, managed, and destroyed through Smart Contracts and is not issued, controlled, or guaranteed by the Platform Operator.

2.7 Gas Fees

“Gas Fees” refer to the transaction fees paid to the Third-Party Blockchain Network to validate and process Token Transactions. The fees fluctuate based on network demand and are outside the control of the Platform Operator.

2.8 Interim Measures

“Interim Measures” refer to temporary legal remedies or injunctions granted by a court or arbitrator to preserve the status quo or prevent imminent harm pending the outcome of a dispute resolution process.

2.9 Liquidation

“Liquidation” refers to the automatic process executed by Smart Contracts, whereby under-collateralised debt positions are closed, and the deposited Collateral is seized and distributed to the Stability Pool Users to cover outstanding debt.

2.10 Platform

“Platform” refers to the Felix protocol, a decentralised, over-collateralised stablecoin system that enables Users to mint, redeem, and manage feUSD through autonomous Smart Contracts. The Platform operates independently of any central authority or intermediary, and its functionality is governed by the rules encoded within the Smart Contracts deployed on a Third-Party Blockchain Network.

2.11 Platform Operator

“Platform Operator” refers to the entity responsible for providing and maintaining the User Interface that facilitates access to the Platform. The Platform Operator does not control the Smart Contracts, custody user funds, or intervene in Token Transactions executed on the Third-Party Blockchain Network.

2.12 Redemption

“Redemption” refers to the process by which feUSD holders can exchange their tokens for $1 worth of Collateral at face value from the Platform, minus any applicable fees. Redemptions are processed through the Smart Contracts against open debt positions with the lowest interest rates.

2.13 Smart Contracts

“Smart Contracts” refers to self-executing programs deployed on a Third-Party Blockchain Network that govern the operations of the Platform. These programs automate the Platform’s core functionalities, including minting feUSD, managing collateralised debt positions, processing liquidations, and redemptions. Smart Contracts operate autonomously and cannot be modified or deleted by the Platform Operator once deployed.

2.14 Stability Pool

“Stability Pool” refers to a pool of feUSD provided to Users to absorb the debt of liquidated positions. Users who participate in the Stability Pool are entitled to a share of the liquidated Collateral and may receive rewards for their contributions.

2.15 Third-Party Blockchain Network

“Third-Party Blockchain Network” is a decentralised public blockchain infrastructure that hosts the Platform’s Smart Contracts and processes Token Transactions. The network validates blocks, executes transactions, and enforces the rules encoded in the Smart Contracts. The Platform Operator has no control over the operation, maintenance, or performance of the Third-Party Blockchain Network.

2.16 Token Transaction

“Token Transaction” refers to any loan, transfer, exchange, minting, redemption, or interaction involving feUSD or Utility Tokens conducted through the Smart Contracts on a Third-Party Blockchain Network.

2.17 User

“User” refers to any professional individual or entity acting in a business or professional capacity with sufficient expertise to understand and assess the legal and financial issues related to the use of the Platform, and accesses or interacts with the Platform through a connected blockchain wallet. Users can mint feUSD, deposit Collateral, participate in Stability Pools, or conduct Token Transactions through the Platform.

2.18 User Interface

“User Interface” is the front-end web application and is an independent interface that allows Users to interact with the Smart Contracts. The User Interface simplifies interactions by enabling wallet connections, transaction submissions, and position monitoring, but it does not execute or control any Token Transactions on the Third-Party Blockchain Network.

2.19 Utility Tokens

“Utility Tokens” are cryptographic tokens issued on a Third-Party Blockchain Network that grants Users access to specific features or services offered through the Platform. Utility Tokens do not represent ownership, investments, or securities.

3. Platform Description

The Platform is an automated, decentralised, over-collateralised lending and borrowing protocol that enables Users to mint feUSD, a protocol-generated stablecoin pegged to the U.S. dollar. The Platform operates through autonomous Smart Contracts deployed on a Third-Party Blockchain Network and is designed to function without intermediaries, custodians, or centralised control.

The Platform Operator provides access to the Platform through a User Interface but does not control, modify, or intervene in the execution of Token Transactions.

3.1 Decentralisation and Autonomy

The Platform is designed to operate without reliance on any centralised party:

1. Autonomous Smart Contracts: All transactions on the Platform are governed by Smart Contracts deployed on a Third-Party Blockchain Network. These contracts execute automatically based on predefined rules and conditions.

2. No intermediary role: The Platform Operator does not act as an intermediary in Token Transactions. Users interact directly with the Smart Contracts, assuming full responsibility for their transactions.

3.2 Core Components of the Platform

The Platform consists of several key components that work together to ensure the stability and functionality of the system:

1. feUSD: A stablecoin created and managed through the Platform’s Smart Contracts, serving as the unit of account within the Platform. Users can mint feUSD by depositing Collateral into the Platform.

2. Collateral: Digital assets accepted by the Platform to secure debt positions and mint feUSD. The Platform requires over-collateralisation to ensure system solvency and mitigate the risks of market volatility.

3. Smart Contracts: Autonomous programs deployed on a Third-Party Blockchain Network that govern all transactions on the Platform. These Smart Contracts handle minting, redemptions, liquidations, and the distribution of Collateral.

4. Stability Pool: A pool of feUSD provided by Users to absorb the debt of liquidated positions. Stability Pool depositors are entitled to a share of the liquidated Collateral and may earn rewards for their contributions.

3.3 Users Activities on the Platform

Users can use the Platform as follows:

1. Minting feUSD: Users deposit Collateral into the Smart Contracts and receive newly minted feUSD in return. The amount of feUSD minted depends on the value of the deposited Collateral and the required Collateralization Ratio.

2. Borrowing or lending feUSD: Users can borrow or lend feUSD at an interest rate determined at their sole discretion. This interest rate can be adjusted by the Users.

3. Redemption: Users can redeem their feUSD for Collateral at a rate of $1 worth of Collateral per feUSD redeemed. Redemptions are processed through the Platform’s Smart Contracts and reduce the debt of open positions with the lowest interest rates. Users shall bear in mind that the Redemption will primarily impact loans with the lowest interest rates.

4. Providing Stability: Users can deposit feUSD into Stability Pools to help maintain the system’s solvency. In return, they receive a share of the liquidated Collateral and may earn rewards for their contributions.

5. Monitoring Positions: Users must actively monitor their Collateralisation Ratios to avoid liquidation. The Platform provides real-time tools for Users to track the value of their Collateral and debt positions.

3.4 Over-Collateralisation System

The Platform operates as an over-collateralised system, meaning that the value of the Collateral deposited by Users must exceed the value of the feUSD they mint. This mechanism provides a safety buffer to protect the Platform from market volatility and ensures that feUSD remains fully backed by Collateral.

To maintain system stability, several mechanisms can be implemented, such as:

1. Liquidation Mechanism: If a User’s Collateralisation Ratio falls below the required threshold, the Platform will automatically liquidate the position. The seized Collateral is distributed to Stability Pool participants to cover the outstanding debt. Redemption Mechanism: Users holding feUSD can redeem their tokens for Collateral at face value through the Smart Contracts. Redemptions reduce the circulating supply of feUSD, helping to maintain its peg to the U.S. dollar.

2. Stability Pools: Users can deposit feUSD into dedicated Stability Pools corresponding to each supported Collateral asset. These deposits are used to absorb debt from liquidated positions, and depositors receive a share of the liquidated Collateral.

4. Platform Operator

The Platform Operator provides and maintains the User Interface that enables Users to interact with the Platform’s Smart Contracts. The Platform Operator’s role is strictly limited to facilitating access to the Platform, and it does not control, manage, or intervene in Token Transactions conducted on the Third-Party Blockchain Network.

4.1 Duties of the Platform Operator

The Platform Operator shall, to the extent possible, provide and maintain the User Interface through which Users can access the Platform.

The User Interface is designed to facilitate interactions with the Smart Contracts, including:

• Connecting blockchain wallets.

• Viewing Collateral and feUSD balances.

• Minting and redeeming feUSD.

• Monitoring open positions and Collateralisation Ratios.

• Participating in Stability Pools.

The Platform Operator does not guarantee uninterrupted access or the absence of bugs, vulnerabilities, or errors in the User Interface.

4.2 No Custodial Services

The Platform Operator does not provide Custodial Services for any Utility Tokens, feUSD or private keys. Users remain solely responsible for securing their wallets, private keys, and recovery phrases.

The Platform Operator:

1. Does not store or manage user assets: All assets, including Collateral, feUSD, and Utility Tokens, are managed directly by the Smart Contracts on the Third-Party Blockchain Network.

2. Cannot recover lost credentials: The Platform Operator has no ability to recover lost or compromised private keys.

4.3 No Issuance or Control of feUSD

The Platform Operator does not issue, manage, or control feUSD or any other Utility Tokens. feUSD is generated, redeemed, and managed exclusively through the Smart Contracts, based on the rules encoded within them.

The Platform Operator makes no guarantees regarding:

1. The value or stability of feUSD: The value of feUSD is subject to market conditions and protocol mechanics. The Platform Operator does not guarantee that feUSD will maintain its peg to the U.S. dollar.

2. The availability of Redemption: Redemption of feUSD is governed by the Smart Contracts and is subject to the availability of Collateral and the rules encoded within the Smart Contracts.

4.4 No Guarantee of Transaction Success

The Platform Operator disclaims all liability for the success, failure, or outcome of any Token Transaction conducted through the Platform. Users acknowledge and accept that:

1. Transactions are final and irreversible: All Token Transactions conducted through the Smart Contracts are final and cannot be reversed or modified once confirmed on the Third-Party Blockchain Network.

2. Network conditions may affect transactions: The success of Token Transactions depends on the performance of the Third-Party Blockchain Network, including network congestion, node failures, and other factors beyond the control of the Platform Operator.

3. Gas Fees are required: Users must ensure they have sufficient funds to cover Gas Fees for each transaction. The Platform Operator does not set or collect these fees.

4.5 No Liability for Smart Contract Risks

The Platform Operator disclaims all liability for any bugs, vulnerabilities, or exploits in the Smart Contracts. Users interact with the Smart Contracts at their own risk.

The Platform Operator does not audit or guarantee Smart Contracts: While the Smart Contracts are audited by third parties, the Platform Operator does not guarantee their security or functionality. The audit reports are available on https://usefelix.gitbook.io/felix-docs.

4.6 No liability for Risks Associated with Platform Use

The Platform Operator plays no role in managing the risks associated with using the Platform, including market risks, regulatory risks, or technological risks.

Users must take proactive measures to manage their own risks, including:

1. Monitoring Collateralisation Ratios to avoid Redemption or Liquidation.

2. Understanding the Redemption mechanism and the impact of market conditions on feUSD stability.

3. Securing Private Keys to prevent unauthorised access to their digital assets

5. Access and Use of the Platform

5.1 Wallet Connection Requirement

To access and interact with the Platform, Users must connect a compatible blockchain wallet through the User Interface provided by the Platform Operator. Users acknowledge that by connecting their wallet, they are engaging directly with the Smart Contracts on a Third-Party Blockchain Network.

Users are responsible for ensuring that:

1. Their connected wallet is secure and properly configured to interact with the Platform.

2. They have sufficient funds in their wallet to cover Token Transactions and associated Gas Fees.

3. They understand the mechanics and risks of interacting with Smart Contracts.

The Platform Operator disclaims all liability for losses resulting from errors, misconfigurations, or unauthorised access to Users’ wallets.

5.2 Conditions of Use

By connecting to the Platform, Users represent and warrant that they:

1. Are authorised to use the Platform: Users confirm that they have the legal capacity and authority to enter into a binding agreement under these Terms.

2. Are acting in a professional capacity: Users acknowledge that the Platform is intended for professional use by professional individuals or entities that have sufficient expertise to understand and assess the legal and financial issues related to the use of the Platform. Users represent that they are not accessing the Platform for personal, household, or consumer purposes.

3. Are Compliant with Applicable Laws: Users confirm that their activities on the Platform comply with all Applicable Laws, including but not limited to financial regulations, anti-money laundering (AML) requirements, and tax obligations, as outlined in Section 9.3.

4. Are not subject to sanctions or restrictions: Users confirm that they are not subject to any sanctions or restrictions imposed under Applicable Laws. Users further confirm that they are not listed on any sanction lists maintained by competent authorities, do not directly or indirectly own or control any assets associated with sanctioned persons or entities, and have not received any assets from such persons or entities. Additionally, Users confirm that they will not engage in any transactions or activities on the Platform that involve individuals, entities, or jurisdictions subject to such sanctions or restrictions.

5.3 Security and User Responsibility

Users are responsible for securing their blockchain wallets and private keys. The Platform Operator does not manage, store, or recover User credentials, and Users must take all necessary precautions to prevent unauthorised access to their wallets.

The User must:

1. Secure Their Wallets: Implement appropriate security measures, such as using hardware wallets and securing recovery phrases.

2. Verify Transactions: Carefully verify transaction details before initiating any Token Transactions through the User Interface or directly on the Third-Party Blockchain Network.

The Platform Operator disclaims all liability for losses resulting from unauthorised access to User wallets or errors in Token Transactions initiated by Users.

5.4 Suspension or Termination of Access

The Platform Operator reserves the right to suspend or terminate a User’s access to the User Interface at its sole discretion if the User violates these Terms or engages in prohibited activities, as outlined in Section 7.4.

Suspension or termination of access does not affect the User’s ability to interact with the Smart Contracts directly on the Third-Party Blockchain Network. Users remain responsible for managing their positions and complying with the protocol’s rules, even if their access to the User Interface is restricted.

6. Services

The Platform provides a decentralised infrastructure that allows Users to interact with Smart Contracts to perform various financial activities. The services offered by the protocol include the ability to mint feUSD (6.1), borrow or lend feUSD (6.2), manage collateralised debt positions (6.3), participate in Stability Pools (6.4), and redeem Collateral (6.5). All services are executed automatically through Smart Contracts on a Third-Party Blockchain Network.

The Platform Operator provides access to these services through the User Interface but does not issue feUSD, manage User funds, or intervene in Token Transactions.

The information provided in connection with access and use of the services is for informational purposes only. While the Platform operator aims to deliver accurate and reliable content, the Platform Operator cannot guarantee its accuracy, completeness, or timeliness. The information may be outdated, contain errors, or have omissions. Users should not make decisions or take actions based solely on the information available on the Platform, including, but not limited to, https://usefelix.gitbook.io/felix-docs or any other content provided, such as blog posts, data, articles, third-party links, news feeds, tutorials, tweets, or videos. The Users acknowledge and agree that the Platform operator shall not be held responsible or liable, either directly or indirectly, for any damage or loss arising from, or allegedly caused by, the use of or reliance on any content, goods, or services accessed through such sites or resources.

6.1 Minting feUSD

The first service provided by the Platform is the ability to mint feUSD, a stablecoin pegged to the U.S. dollar. Users can mint feUSD by depositing eligible Collateral into the Smart Contracts.

The process of Minting feUSD is outlined below:

1. Collateral deposit: Users deposit supported digital assets as Collateral.

2. Debt position creation: The Platform creates a collateralised debt position for the User, recording the amount of Collateral and the corresponding debt in feUSD.

3. feUSD minting: The User receives newly minted feUSD in their connected wallet, which can be used within the Platform or across other decentralised applications.

The amount of feUSD that can be minted is limited by the required Collateralisation Ratio to ensure the Platform’s solvency.

6.2 Borrowing or Lending feUSD

The Platform offers an ability for the Users to borrow or lend feUSD by depositing eligible Collateral into the Smart Contracts.

The process of borrowing feUSD is outlined below:

1. Collateral deposit: Users deposit supported digital assets as Collateral.

2. Collateral factor: The maximum amount that Users can borrow is limited by the Collateral factors of the assets they have provided.

3. Borrowed balance: refers to the sum of a User’s current borrowed amount plus the interest to be repaid.

4. Interest rate: Borrowers must pay the prevailing rate of interest on the feUSD they borrow. The interest rate is determined at the User’s sole discretion.

The Users shall refer to the information available on https://usefelix.gitbook.io/felix-docs.

6.3 Managing Collateralised Debt Positions

The Platform provides real-time tools through the User Interface to help Users track their positions.

6.4 Stability Pools

The Platform offers Stability Pools where Users can deposit their feUSD to help absorb the debt of liquidated positions. In return, Stability Pool Users receive a proportional share of the liquidated Collateral and may earn rewards.

The Stability Pools function as follows:

1. Debt Absorption: When a User’s position is liquidated, the outstanding debt is canceled using feUSD from the Stability Pool.

2. Collateral Distribution: The Collateral from the liquidated position is distributed to Stability Pool Users based on their share of the Stability Pool.

3. Rewards for Participation: Users will receive additional rewards for providing stability to the Platform as outlined on the website.

Stability Pools are essential for maintaining the Platform’s solvency and mitigating the risks of under-collateralized positions.

6.5 Redeeming feUSD for Collateral

Users holding feUSD can redeem their tokens for Collateral at face value through the Platform’s redemption mechanism.

The Redemption process operates as follows:

1. Initiation: The User sends a specified amount of feUSD to the Platform for Redemption.

2. Collateral transfer: The Platform transfers $1 worth of Collateral per feUSD redeemed, minus any applicable fees.

3. Reduction of debt positions: Redemptions reduce the debt of open positions in order of those paying the lowest rate of interest first.

Redemptions create an arbitrage opportunity for Users to maintain the peg of feUSD to the U.S. dollar by reducing its circulating supply.

6.6 Liquidation Mechanism

The Platform includes a liquidation mechanism to maintain stability and solvency:

1. Liquidation Mechanism: Automatically closes under-collateralised positions to prevent the Platform from accumulating debt.

Users must be aware of the risks involved in using this Platform.

6.7 Limitations of the Platform Operator’s Role

The Platform Operator provides the User Interface to facilitate access to the Smart Contracts but does not:

1. Issue feUSD or Utility Tokens: The Platform Operator has no control over the creation or destruction of feUSD, which is managed entirely by the Platform’s Smart Contracts.

2. Custody User Funds: The Platform Operator does not manage or store User assets. All assets are controlled by Users through their connected wallets.

3. Intervene in Transactions: The Platform Operator does not initiate, approve, or modify any Token Transactions conducted through the Platform.

Users must understand that all interactions with the Platform occur directly through Smart Contracts, and the Platform Operator has no control over the execution of these transactions.

7. User Obligations and Responsibilities

Users assume full responsibility for securing their wallets, managing their positions, and ensuring compliance with legal and regulatory requirements in their jurisdiction.

7.1 Security and Wallet Management

Users are responsible for securing their blockchain wallets, private keys, recovery phrases, and other credentials required to access the Platform. Loss of these credentials may result in permanent loss of access to Utility Tokens, feUSD, or Collateral held within the Platform.

Users must:

1. Implement Security Measures: Use hardware wallets, multi-factor authentication, and other security tools to protect their wallets.

2. Keep Recovery Phrases Secure: Store recovery phrases in a secure, offline location and ensure they are not shared with unauthorised parties.

3. Verify Transactions: Carefully verify transaction details before initiating any Token Transaction through the User Interface or directly on the Third-Party Blockchain Network.

4. Phishing and Social Engineering Attacks: Users must be vigilant against phishing attacks, fake websites, and social engineering attempts to steal their wallet credentials.

5. Unauthorised Transactions: Users are responsible for ensuring that their wallets are secure and that they do not authorise transactions from compromised devices or networks.

The Platform Operator disclaims all liability for losses resulting from unauthorised access to User wallets or errors in Token Transactions initiated by Users.

7.2 Responsibilities of Users

Users are responsible for managing their collateralised debt positions to ensure that their Collateralisation Ratios remain above the Platform’s liquidation threshold.

Users must:

1. Monitor Collateral values: Users must regularly monitor the value of their deposited Collateral and their outstanding debt in feUSD.

2. Maintain a Collateralisation Ratios: Users must ensure that their Collateralisation Ratio stays above the liquidation threshold to avoid automatic liquidation.

3. Add Collateral or repaying Debt: Users can add more Collateral or repay their feUSD debt at any time to improve their position health.

Failure to manage risk effectively may result in the automatic liquidation of a User’s position, resulting in the loss of their Collateral.

7.3 Compliance with Applicable Laws

Users must ensure that their activities on the Platform comply with all Applicable Laws in their jurisdiction as outlined in Section 9.3.

7.4 Prohibited Activities

Users must not engage in any activity that compromises the integrity, security, or functionality of the Platform. Prohibited activities include, but are not limited to:

1. Exploiting Vulnerabilities: Users must not exploit any bugs, errors, or vulnerabilities in the Smart Contracts or User Interface to gain unauthorised advantages. Users who discover a bug, error, or vulnerability in the Platform are encouraged to report it to the Platform Operator through the official communication channel. The Platform Operator may, at its discretion, offer a reward to Users who responsibly disclose security vulnerabilities that could impact the integrity of the Platform.

2. Engaging in Fraudulent or Illegal Activities: Users must not use the Platform to engage in activities that violate any Applicable Laws, including fraud, money laundering, tax evasion, and financing of illegal enterprises.

3. Circumventing Fees: Users must not attempt to bypass Gas Fees, Platform Fees, or other costs associated with using the Platform.

4. Disrupting Network Operations: Users must not deploy bots, scripts, or other automated systems to disrupt or manipulate the Platform’s operations or other Users’ interactions with the Platform.

7.5 User Acknowledgment of Risks

By using the Platform, Users acknowledge and accept the risks associated with interacting with a decentralised finance protocol. These risks include, but are not limited to:

1. Market Risks as outlined in Section 9.2.

2. Smart Contract Risks as outlined in Section 8.2.

3. Blockchain Network Risks as outlined in Section 9.1.

The Platform Operator disclaims all liability for losses resulting from these risks.

7.6 Consequences of Non-Compliance

Failure to comply with these Terms may result in:

1. The Platform Operator may suspend or terminate a User’s access to the User Interface as outlined in Section 5.5.

2. The Platform Operator reserves the right to pursue legal action against Users who engage in fraudulent, illegal, or malicious activities on the Platform.

3. The Platform Operator may report suspected illegal activities to relevant regulatory or law enforcement authorities, as required by Applicable Laws.

Users who lose access to the User Interface may still interact with the Platform’s Smart Contracts directly on the Third-Party Blockchain Network.

7.7 Incident Reporting

Users are encouraged to report bugs, vulnerabilities, or other issues to the Platform Operator through designated communication channels. The Platform Operator may, at its discretion, provide incentives and/or rewards in connection with the above.

8. Smart Contracts and Transactions

The Platform operates entirely through autonomous Smart Contracts deployed on a Third-Party Blockchain Network. These Smart Contracts govern all transactions conducted on the Platform, including minting feUSD, managing collateralised debt positions, processing liquidations, and executing redemptions.

The Platform Operator facilitates access to these Smart Contracts through the User Interface but does not control or intervene in their operation once they are deployed.

8.1 Description of Smart Contracts

The Smart Contracts include:

1. Immutability: Once deployed on the Third-Party Blockchain Network, the code of the Smart Contracts cannot be modified or altered by any party, including the Platform Operator.

2. Automation: The Smart Contracts automatically enforce the rules of the Platform, executing transactions without the need for human intervention. Users must understand that all transactions on the Platform are initiated by Users through their connected wallets and executed directly by the Smart Contracts.

3. Transparency: The code of the Smart Contracts is publicly accessible on the Third-Party Blockchain Network, allowing Users to verify their functionality and understand the rules governing their transactions.

8.2 User Acknowledgements

Users interact directly with the Smart Contracts through their connected wallets. By initiating Token Transactions, Users acknowledge and accept the following responsibilities:

1. Transaction Verification: Users must verify the accuracy of all transaction details before confirming them on the blockchain. This includes the amount of Collateral deposited, the amount of feUSD minted, and any fees associated with the transaction.

2. Understanding Smart Contract Rules: Users must familiarise themselves with the rules and conditions encoded in the Smart Contracts, including the risks of liquidation, redemption fees, and required Collateralisation Ratios. The Smart Contracts may contain bugs or vulnerabilities that could result in unexpected losses.

Failure to verify transaction details or understand the Platform’s rules may result in financial loss, for which the Platform Operator disclaims all liability.

8.3 Irreversibility of Transactions

All Token Transactions conducted through the Smart Contracts are final and irreversible once confirmed on the Third-Party Blockchain Network. This includes, but is not limited to:

1. Minting feUSD.

2. Depositing or withdrawing Collateral.

3. Participating in Stability Pools.

4. Processing Redemptions or liquidations.

Users must exercise caution when initiating transactions, as they cannot be modified, reversed, or canceled once recorded on the Third-Party Blockchain Network.

8.4 Gas Fees and Transaction Costs

Users acknowledge that all transactions conducted through the Platform require Gas Fees paid to the Third-Party Blockchain Network to validate and process the transaction.

1. Responsibility for Gas Fees: Users are solely responsible for ensuring that their wallets contain sufficient funds to cover Gas Fees.

2. Fluctuation of Gas Fees: Gas Fees are determined by the underlying blockchain network, are subject to significant fluctuations based on demand, and may increase during periods of high congestion. The Platform Operator bears no responsibility for failed transactions caused by insufficient Gas Fees or network delays.

3. Failed Transactions: Transactions may fail if insufficient Gas Fees are provided. The Platform Operator disclaims liability for any failed transactions due to insufficient fees or network conditions.

9. Risk Disclosure

Users acknowledge and accept that using the Platform involves significant risks. These risks are inherent to decentralised finance protocols and digital assets and may result in financial losses, loss of access to funds, or other adverse outcomes. The Platform Operator disclaims all liability for any losses arising from these risks, and Users agree to assume full responsibility for managing their risk exposure.

9.1 Technological Risks

The Platform operates through Smart Contracts deployed on a Third-Party Blockchain Network. Users must be aware of the following technological risks:

1. Smart Contract Vulnerabilities as outlined in Section 8.

2. Network Congestion and Downtime: The Third-Party Blockchain Network may experience congestion, downtime, or technical failures that impact transaction processing. Users must be prepared for potential delays or transaction failures.

3. Blockchain Forks: The underlying blockchain network may undergo forks, updates, or changes that could affect the functionality of the Smart Contracts and the availability of the Platform.

9.2 Market Risks

Users must understand that the value of feUSD, Collateral, and other digital assets can fluctuate significantly due to market conditions. The Platform Operator makes no guarantees regarding the stability or value of any digital asset.

1. Volatility of Collateral: The value of Collateral deposited in the Platform may decrease due to market volatility. A sudden drop in Collateral value may trigger liquidation, resulting in the loss of Collateral.

2. Peg Deviations: The market price of feUSD may deviate from its intended peg of $1.00. These deviations may result from market conditions or external factors. Users bear the risk of holding feUSD during such deviations.

3. Redemption and Liquidation Risks as outlined in Section 6.4 and Section 6.5.

9.3 Regulatory and Legal Risks

The regulatory environment for digital assets and decentralised finance is rapidly evolving. Users must be aware of the following regulatory and legal risks:

1. Jurisdictional Restrictions: The Platform Operator makes no representations regarding the legality of the Platform in any specific jurisdiction. Users are responsible for ensuring that their use of the Platform complies with Applicable Laws.

2. Regulatory Changes: Changes in laws, regulations, or policies may impact the legality of the Platform or the use of Utility Tokens, including feUSD. These changes may occur without notice and could affect Users’ ability to access or use the Platform.

3. Tax Obligations: Users are responsible for complying with all applicable tax laws in their jurisdiction, including reporting and paying any taxes owed on gains, income, or transactions conducted through the Platform.

9.4 Security Risks

Users must take proactive measures to secure their blockchain wallets and protect their digital assets from unauthorised access as outlined in Section 7.1.

9.5 User Responsibility for Risk Management

​​By using the Platform, Users explicitly acknowledge the risks associated with decentralised protocols, including but not limited to market volatility, regulatory changes, technological vulnerabilities, and third-party dependencies. The Platform Operator disclaims all liability for financial losses or data breaches resulting from these risks.

Users are responsible for managing their own risk exposure when interacting with the Platform as outlined in Section 7.2.

9.6 Infrastructure Risks

The Platform relies on a Third-Party Blockchain Network to process transactions and host its Smart Contracts. Users must be aware of the following infrastructure risks:

1. Node Failures: The operation of the blockchain network depends on a distributed network of nodes. Failures or attacks on these nodes could disrupt network operations and affect the availability of the Platform.

2. Gas Fee Volatility as outlined in Section 8.4.

10. Limitation of Liability

Users acknowledge that they assume full responsibility for their interactions with the Platform and agree to the following limitations on the Platform Operator’s liability.

10.1 Assumption of Risks for Users

The Platform Operator disclaims all liability for any losses or damages arising from Token Transactions initiated by Users on the Platform. This includes transactions such as minting feUSD, depositing or withdrawing Collateral, participating in Stability Pools, and processing redemptions or liquidations.

Specifically, the Platform Operator is not be liable for these risks, which are not limited to the following list:

1. Incorrect or unauthorised transactions: as outlined in Section 7.1 and Section 7.4.

2. Unauthorised access to wallets: as outlined in Section 4.6 and Section 5.1.

3. Transaction failures: as outlined in Section 4.3.

4. Liquidations and Redemptions: as outlined in Section 6.4 and Section 6.5.

5. Peg deviations: The market price of feUSD may deviate from its intended peg of $1.00 due to market conditions or other factors beyond the control of the Platform Operator.

6. Volatility of Collateral: The value of Collateral deposited by Users may fluctuate significantly, affecting the health of their positions and the stability of feUSD.

7. Redemption risks: Users holding feUSD may be subject to redemption processes governed by the Smart Contracts, which may impact their holdings.

8. Loss of private keys: Users are responsible for securing their private keys, recovery phrases, and other wallet credentials. The Platform Operator cannot recover lost credentials.

9. Bugs, vulnerabilities, or exploits: The Smart Contracts may contain bugs, vulnerabilities, or exploits that could result in unexpected behavior or loss of funds.

10. Protocol changes or forks: The underlying blockchain may undergo changes, including forks or upgrades, that could impact the functionality of the Smart Contracts.

11. Permanent Loss of Funds: Issues with the Smart Contracts may result in permanent loss of funds or positions.

12. Network Failures: Issues with the underlying Third-Party Blockchain Network, including node failures, network congestion, or attacks.

13. Regulatory Actions: Changes in laws or regulations that affect the operation or legality of the Platform.

14. Force Majeure Events: Acts of God, natural disasters, wars, cyberattacks, or other unforeseen events.

If any jurisdiction limits the extent to which liability may be disclaimed or limited, the Platform Operator’s liability shall be limited to the maximum extent permitted by law.

11. Indemnification

By accessing and using the Platform, Users agree to indemnify, defend, and hold harmless the Platform Operator and its affiliates, officers, directors, employees, agents, and representatives (collectively, the “Indemnified Parties”) from and against any and all claims, demands, damages, losses, liabilities, costs, and expenses, including reasonable legal fees, arising out of or related to:

1. User’s Use of the Platform: Any activities conducted by the User on or through the Platform, including interactions with Smart Contracts and Token Transactions.

2. Violation of Terms: Any breach by the User of these Terms.

3. Violation of Applicable Laws: Any breach by the User of applicable local, national, or international laws, regulations, or rules.

4. Third-Party Claims: Any claims brought by third parties as a result of the User’s actions on the Platform, including claims of intellectual property infringement, fraud, or illegal activities.

11.1 Scope of Indemnification

The User’s indemnification obligation extends to the following:

1. Legal Costs and Fees: Reasonable legal costs, attorney fees, court costs, and expenses incurred by the Indemnified Parties in defending any claim.

2. Settlement Amounts: Any amounts paid in settlement of a claim, provided that the Platform Operator obtains the User’s consent before agreeing to a settlement (such consent not to be unreasonably withheld).

3. Damages and Losses: Any damages, losses, fines, penalties, or liabilities incurred by the Indemnified Parties as a result of the User’s actions.

11.2 Exceptions to Indemnification

The User’s indemnification obligation does not apply to claims, damages, or losses arising solely from:

1. Gross Negligence or Willful Misconduct: Any gross negligence or willful misconduct by the Platform Operator or its affiliates.

2. Platform Operator’s Breach of Terms: Any material breach of these Terms by the Platform Operator that directly causes harm to the User.

The burden of proving that a claim falls within one of these exceptions lies with the User.

11.3 Third-Party Claims

If any third-party claim is brought against the Platform Operator or other Indemnified Parties as a result of the User’s activities on the Platform, the User agrees to:

1. Assume the Defense: Take responsibility for defending the claim at the User’s own expense.

2. Appoint Legal Counsel: Appoint legal counsel reasonably acceptable to the Indemnified Parties to manage the defense.

3. Reimburse Costs: Reimburse the Indemnified Parties for any expenses incurred in participating in the defense of the claim.

The Platform Operator reserves the right to participate in the defense of any third-party claim at its own expense and to approve any proposed settlement terms.

11.4 Indemnification Process

The following process applies to any indemnification claim made under this section:

1. Notice of Claim: The Indemnified Parties must notify the User promptly upon becoming aware of any claim that may give rise to an indemnification obligation. Failure to provide timely notice does not relieve the User of their indemnification obligations, except to the extent that the delay materially prejudices the User’s ability to defend the claim.

2. Defense and Settlement: The User must assume control of the defense of the claim and may settle the claim only with the prior written consent of the Indemnified Parties.

3. Cooperation: The Indemnified Parties agree to cooperate fully with the User in the defense of the claim, including providing documents, information, and testimony as reasonably requested.

11.5 Limitation on Indemnification Liability

The User’s indemnification obligations are subject to the following limitations:

1. Proportional Liability: The User’s indemnification obligation is limited to the extent that the damages, losses, or liabilities incurred by the Indemnified Parties are proportionally attributable to the User’s actions or omissions.

2. Jurisdictional Limitations: The indemnification obligations are subject to any limitations imposed by the laws of the jurisdiction governing these Terms, as outlined in Section 12 (Governing Law and Dispute Resolution).

11.6 No Waiver of Immunity

Nothing in this section shall be construed as a waiver of any legal immunity or defense available to the Indemnified Parties under applicable law. The Platform Operator reserves the right to assert any and all legal defenses to minimize its liability.

12. Governing Law and Dispute Resolution

These Terms shall be governed by and construed in accordance with the laws of the Cayman Islands, without regard to its conflict of laws principles. Any dispute arising from or related to these Terms, including questions regarding their existence, validity, or termination, shall be resolved through arbitration in accordance with the provisions of this section.

12.1 Amicable Resolution of Disputes

The parties agree to endeavor to resolve any dispute, controversy, or claim arising out of or in connection with these Terms (a “Dispute”) through good faith negotiations. If the parties are unable to resolve the Dispute amicably within thirty (30) days of one party notifying the other of the Dispute in writing, the matter shall be referred to arbitration in accordance with Section 12.2.

12.2 Arbitration Agreement

Any Dispute that cannot be resolved amicably shall be referred to and finally resolved by arbitration under the Arbitration Rules of the Cayman International Mediation and Arbitration Centre Ltd (CIMAC), which are deemed to be incorporated by reference into this section.

The arbitration shall be conducted as follows:

1. Number of Arbitrators: The arbitration shall be conducted by a single arbitrator appointed in accordance with the CIMAC Rules.

2. Seat of Arbitration: The seat of arbitration shall be the Cayman Islands.

3. Conduct of Proceedings: The arbitration proceedings shall be conducted entirely online via email communications and web conferences, unless the parties agree otherwise in writing.

4. Language: The language of the arbitration shall be English.

5. Confidentiality: The arbitration proceedings, including all submissions, evidence, and decisions, shall be kept strictly confidential by the parties and the arbitrator.

12.3 Allocation of Costs

The party initiating the arbitration shall bear all costs and fees associated with the arbitration proceedings, including but not limited to:

1. Arbitrator Fees: The fees and expenses of the arbitrator.

2. Administrative Fees: Fees charged by the Cayman International Mediation and Arbitration Centre Ltd.

3. Other Costs: Any other costs incurred during the arbitration process.

The arbitrator may, at their discretion, reallocate the costs of arbitration between the parties in the final award. However, each party shall be responsible for its own legal fees, consultant fees, expert fees, and other expenses incurred in connection with the arbitration, regardless of the outcome of the proceedings.

12.4 Waiver of Class or Collective Actions

To the fullest extent permitted by Applicable laws, Users agree that any dispute must be resolved on an individual basis and not as part of any class, collective, or representative action.

Users expressly waive any right to participate in class or collective proceedings, whether in arbitration or otherwise.

12.5 No Limitation on Provisional Relief

Nothing in this section shall be construed as limiting the right of either party to seek provisional relief or Interim Measures from a court of competent jurisdiction to preserve the status quo or protect against imminent harm, pending the outcome of the arbitration.

12.6 Jurisdiction for Non-Arbitrable Matters

In the event that any claim is not subject to arbitration under applicable law, such claim shall be submitted to the exclusive jurisdiction of the courts of the Cayman Islands.

12.7 Survival of Dispute Resolution Provisions

The provisions of this section shall survive the termination of these Terms and shall remain binding on the parties with respect to any dispute arising from or related to the use of the Platform.

13. Amendments to the Terms

The Platform Operator reserves the right to amend, modify, update, or replace these Terms at any time to reflect changes in business practices, legal or regulatory requirements, technological advancements, or other relevant factors. Such amendments shall become effective upon publication of the updated Terms through the User Interface or another official communication channel designated by the Platform Operator.

13.1 Notification of Amendments

The Platform Operator will notify Users of any material amendments to these Terms by posting a Notice on the User Interface: A notification will be displayed prominently on the Platform.

13.2 User Responsibility to Stay Informed

It is the User’s responsibility to regularly review the Terms to stay informed of any amendments. The most current version of the Terms will always be accessible through a link on the User Interface.

Users acknowledge that by continuing to access or use the Platform after the publication of amended Terms, they agree to be bound by the updated Terms. If a User does not agree with any amendment, they must:

1. Immediately discontinue use of the Platform; and

2. Cease all interactions with the Platform’s Smart Contracts.

Failure to cease use of the Platform after the publication of amendments constitutes acceptance of the amended Terms.

13.3 No Retroactive Amendments

Amendments to these Terms shall not apply retroactively. Any transactions conducted on the Platform prior to the effective date of an amendment will be governed by the version of the Terms in effect at the time the transaction was initiated.

13.4 Severability of Amendments

If any amendment to these Terms is found to be invalid, unlawful, or unenforceable by a court of competent jurisdiction or through arbitration, the remaining provisions of these Terms shall remain in full force and effect.

The Platform Operator will make reasonable efforts to replace any invalid or unenforceable amendment with a valid provision that achieves the intended purpose as closely as possible.

14. Miscellaneous

This section outlines additional provisions that govern the relationship between the Platform Operator and Users, ensuring the enforceability and proper interpretation of these Terms.

14.1 Entire Agreement

These Terms constitute the entire agreement between the User and the Platform Operator regarding the use of the Platform. They supersede all prior or contemporaneous communications, representations, or agreements, whether oral or written, relating to the subject matter of these Terms.

No oral or written statements or representations not expressly included in these Terms shall be binding on either party.

14.2 Force Majeure

The Platform Operator shall not be held liable for any delay or failure to perform its obligations under these Terms due to events beyond its reasonable control, including but not limited to: acts of God, natural disasters, government actions, cyberattacks, blockchain network failures and technical failures or downtime.

During a force majeure event, the Platform Operator’s obligations will be suspended for the duration of the event, and the Platform Operator will make reasonable efforts to resume operations as soon as practicable.

14.3 Assignment

The Platform Operator may assign or transfer its rights and obligations under these Terms without the prior consent of the User, including in connection with a merger, acquisition, or sale of assets.

Users may not assign or transfer their rights or obligations under these Terms without the prior written consent of the Platform Operator. Any attempted assignment or transfer without such consent shall be void and of no effect.

14.5 Notices

All notices or communications required under these Terms must be delivered in writing to the Platform Operator at the contact information provided on the User Interface or through other official communication channels ([e-mail]) specified by the Platform Operator.

Notices to Users may be delivered via the User Interface, through notifications or updates posted on the Platform.

Users are responsible for regularly checking the User Interface for notices from the Platform Operator.

14.6 No Waiver

The failure of the Platform Operator to enforce any right or provision of these Terms shall not constitute a waiver of such right or provision. Any waiver must be explicitly stated in writing and signed by an authorized representative of the Platform Operator.

A waiver of any breach or default shall not constitute a waiver of any subsequent breach or default.

14.7 No Partnership or Agency

Nothing in these Terms shall be construed to create a partnership, joint venture, agency, or fiduciary relationship between the User and the Platform Operator. Each party acts as an independent entity, and neither party has the authority to bind or obligate the other in any manner.

14.8 Survival of Provisions

The following provisions shall survive the termination of these Terms and the User’s access to the Platform:

• Section 7: User Obligations and Responsibilities

• Section 9: Risk Disclosure

• Section 10: Limitation of Liability

• Section 11: Indemnification

• Section 12: Governing Law and Dispute Resolution

• Section 14: Miscellaneous

These provisions shall remain effective to the extent necessary to enforce rights and obligations that arose prior to termination or to address ongoing responsibilities.

14.9 Interpretation

The headings and section titles used in these Terms are for convenience only and do not affect the interpretation or meaning of the provisions. Any ambiguities or uncertainties in the language of these Terms shall not be construed against the drafter.

14.10 Language

These Terms are drafted in the English language. If these Terms are translated into another language, the English version shall prevail in the event of any discrepancies or conflicts.

14.11 No Third-Party Beneficiaries

These Terms are for the sole benefit of the User and the Platform Operator. No third party shall have any rights to enforce any provision of these Terms, except where expressly stated otherwise.

14.12 User Data & Privacy Security

The Platform Operator may collect limited data to facilitate user interactions, including blockchain wallet addresses and transactional metadata. This data will not be shared with third parties except as required by law or to enforce these Terms. Users are responsible for safeguarding their private information and credentials.