Risks

Liquidation

This is the main risk of borrowing. If your collateral falls in value, or your debt grows with interest, your health factor drops. Below 1.00, anyone can liquidate part of your position, and you lose that collateral plus a bonus paid to the liquidator.

• It can happen at any hour, including when you are asleep.
• On Morpho, the maximum LTV and the liquidation threshold are the same number. Borrowing the maximum puts you at the edge from the first minute.
• You may lose collateral even if the stock price later recovers.

Market hours and price gaps

The stocks behind the tokens trade on US exchanges with set hours, but your loan is live all the time. On nights, weekends and holidays the real market is closed and the oracle price barely moves. When the market reopens, the price can jump in one step.

A loan that looked safe on Friday can be liquidated on Monday morning. The Weekend Guard shows a rough warning, but its stress gaps are assumptions, not forecasts, and a real gap can be larger.

Price and oracle risk

Protocols use an oracle, a price feed, to value your collateral. Liquidations use the oracle price, not the price on the exchange you look at. The two can differ.

Oracles can lag, fail or be wrong. A bad price can liquidate a loan that was healthy, or let someone borrow too much. You cannot control this.

Smart contract risk

Your position lives in smart contracts: Kamino Lend on Solana, Morpho Blue and the USDG vaults on Robinhood Chain. Contracts can have bugs, and a bug can cause a loss of funds. stockloan.fun did not write these contracts and does not control them.

The protocols and vault curators can also change settings, such as loan to value limits, liquidation thresholds, interest rate models and deposit caps. The checks inside stockloan.fun reduce the chance of signing a wrong transaction, but they do not protect you from a problem in the protocol itself.

Approvals you sign let a contract move the approved amount of a token. The app asks for exact amounts only.

Tokenized stock specifics

• Price exposure only. xStocks are tracker certificates issued by Backed Assets (JE) Limited. Robinhood Stock Tokens are tokenized debt securities issued by Robinhood Assets (Jersey) Limited. Neither gives voting rights or a legal claim on the underlying share. Holding one is not the same as owning the share.
• Issuer, custody and redemption risk. The value of the token depends on the issuer and on how the underlying shares are held.
• The token price can differ from the stock price, especially when markets are closed or trading in the token is thin.
• Corporate actions. Stock Token balances can be adjusted for events such as splits through an on chain multiplier.
• Restrictions. The tokens are not available to US persons or in restricted countries, and the rules can change. See who can use it.

Dollar token risk

The dollars you borrow or lend are tokens such as USDC and USDG. A dollar token can lose its peg to the dollar. Its issuer is a third party, and the app does not control it.

Rates and liquidity

• Rates are variable. Borrow and supply rates can change at any time, and they can go up fast when a pool gets busy. The "interest per year" and "projected earnings" figures are snapshots of today's rate.
• You may not be able to withdraw. Lenders can only withdraw what is not lent out. When a pool, market or vault is heavily used, withdrawals can wait until borrowers repay or new dollars arrive.
• Thin markets. Some Robinhood Chain stock markets hold very little USDG to borrow. Markets that are not listed can carry much higher rates.
• Vault curators. A vault lends your USDG according to its curator's choices. You depend on those choices.

Interface and data risk

Data can be late or wrong, and public RPC endpoints can go down. Numbers such as APY, health factor and liquidation price are estimates. If a data source is down, the app says so instead of showing old numbers, but a problem can still stop you from acting at the moment you need to.

Your position lives in the protocol, not in this app. If this website is unavailable, the position is still there and can be managed with other apps for Kamino or Morpho.

Your wallet and your choices

You control your wallet and approve every transaction. Nobody can reverse a transaction or recover lost keys. We will never ask for your seed phrase. Anyone who does is trying to steal from you.

Ways to lower the risk

• Borrow well below the maximum. Watch the health factor, and treat anything under 1.25 as a warning.
• Use the Weekend Guard on Fridays and before holidays. Consider its safer LTV.
• Keep dollars in your wallet, or spare stock tokens, so you can repay or add collateral quickly.
• Start small, and check a transaction's review box before you sign.
• Only use money you can afford to lose.