> For the complete documentation index, see [llms.txt](https://docs.hoodfun.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.hoodfun.xyz/risks-and-security.md). # Risks and security hood.fun interacts with several external systems — Lighter (the perp exchange LTs are hedged on), Uniswap V2 (post-graduation trading), and an off-chain keeper that signs NAV updates. Downtime, bugs, or exploits in any of these can affect LTs like HOOD5 and the memes backed by them. #### The keeper is the trust point Contracts never touch Lighter directly — they only know an LT's value because the keeper signs it and posts it on-chain. If the keeper stops running, that LT's NAV goes stale and its vault (and every meme backed by it) freezes: mint, redeem, and curve trades all stop until the keeper catches back up. This is a deliberate fail-safe, not a bug — the contracts refuse to trust an old price rather than letting trades happen on stale data. #### Leverage risk LTs carry real leverage on a real, market-priced underlying. A large enough adverse move between keeper rebalances can wipe an LT's NAV to zero. Even in calm markets, constant-leverage rebalancing bleeds value during choppy, sideways price action (decay) — a token backed by an LT can lose value over time even if the underlying asset ends up flat. #### Can I lose more than I put in? No. Your maximum loss on any single trade is what you spent. An LT's NAV can approach zero in extreme conditions, but the contracts don't create leveraged liabilities beyond your position. #### Security posture The contracts have had a Slither pass and manual review, with checks-effects-interactions ordering and dust/precision hardening applied — but **this is not a substitute for a professional audit**, and none has been done yet. Treat this as unaudited software. Every LT you can back a token with runs fully isolated — its own vault, its own oracle, its own margin. A wipe or outage on one LT can't freeze or drain another. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.hoodfun.xyz/risks-and-security.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.