Risks

Last updated 2026-10-18

Onchain trading and liquidity provision can lose money, sometimes all of it. These are the main risks; only use funds you can afford to lose.

1. Smart contracts

Trades, transfers and deposits run on smart contracts written by others (and our router on Robinhood Chain). Audited code can still have bugs, be exploited or be upgraded by its owners. Funds lost to a contract failure are usually not recoverable.

2. Tokenized stocks

  • The token is a claim on its issuer, not a share. If the issuer fails, stops redemptions or is restricted, the token can lose value or become untradeable.
  • Issuers may restrict who can hold or transfer their tokens and may freeze them.
  • Corporate actions (splits, dividends) are handled by each issuer in its own way, sometimes with delays.
  • After hours and on weekends prices come from oracles and thin onchain liquidity and can gap at the next open.

3. Prices, slippage and oracles

Prices move while your transaction is pending. Thin markets move more for larger sizes. Oracle prices can be stale or wrong, and pools priced by an oracle stop quoting when it is.

4. Bridges and other chains

Cross-chain transfers depend on the bridge and on both networks. They can be delayed, refunded on the origin chain, or, in a bridge failure, lost.

5. Providing liquidity

  • A pool sells what rises and buys what falls, so a deposit can end up worth less than simply holding the two tokens.
  • When the price leaves your range your deposit is all in one token and earns nothing until the price returns or you move it.
  • Protections such as stop-loss pause quoting after a loss; they limit further losses, not the ones already taken.
  • Yields shown are past fees over current liquidity. They change every day and small pools swing the most.
  • Curators can change fees within limits and pause quoting.

6. Stablecoins

Stablecoins can lose their peg or be frozen by their issuer.

7. Your wallet and phishing

Anyone with your keys controls your funds. Check the site address and every wallet prompt. 1k will never ask for your seed phrase.

8. Rules and taxes

Rules for tokenized securities and crypto differ by country and change often. Some products may become unavailable to you. Trades can have tax consequences you are responsible for.