Risk Disclosure

1. Market Risks

1.1 Volatility Risk

Cryptocurrency markets are characterized by extreme price volatility. The value of digital assets can fluctuate dramatically within very short time periods, including intra-day. Price swings of 10-30% or more within a single day are not uncommon in cryptocurrency markets.

• Prices may drop rapidly and without warning due to market sentiment, news events, regulatory announcements, or large-scale liquidations
• Historical volatility is not a reliable indicator of future volatility
• Volatility can be amplified during periods of low liquidity or market stress
• Cryptocurrency markets operate 24/7, meaning price movements can occur at any time, including outside your monitoring hours

1.2 Liquidity Risk

Not all cryptocurrency markets have sufficient liquidity at all times. Liquidity risk manifests in several ways:

• Large orders may cause significant price slippage, resulting in execution prices substantially different from expected prices
• During periods of market stress or high volatility, liquidity may evaporate, making it difficult or impossible to exit positions at desired prices
• Certain trading pairs or assets may have inherently low liquidity, leading to wider bid-ask spreads and unfavorable execution
• Market depth can change rapidly and unpredictably

1.3 Gap Risk

While cryptocurrency markets trade continuously, significant price gaps can still occur:

• Flash crashes or rapid price movements may cause prices to "gap" through stop-loss levels, resulting in executions at significantly worse prices than intended
• Network congestion on blockchain networks may delay order execution, during which prices may move substantially
• Exchange outages or maintenance periods may prevent trading when critical price movements occur

1.4 Leverage Risk

Trading with leverage significantly amplifies both potential profits and potential losses. Leverage is a double-edged sword.

• With leveraged positions, even small adverse price movements can result in losses exceeding your initial margin
• Positions may be automatically liquidated if the margin ratio falls below the maintenance threshold, resulting in the total loss of the position's margin
• In extreme market conditions, losses from leveraged positions may exceed the capital allocated to the position
• Higher leverage ratios exponentially increase the risk of liquidation
• Funding rates on perpetual contracts can be significant and unpredictable, affecting the cost of maintaining leveraged positions

2. Technology & Platform Risks

2.1 Smart Contract Risk

EulerX connects to Hyperliquid DEX, which operates on smart contract technology. Smart contracts carry inherent risks:

• Smart contracts may contain bugs, vulnerabilities, or unintended behavior that could result in loss of funds
• Smart contract exploits or hacks on the underlying DEX could affect your positions or funds
• Blockchain network upgrades or forks could affect the functioning of smart contracts
• EulerX has no control over the smart contracts of third-party platforms and cannot guarantee their security or functionality

2.2 API Risk

The Service relies on API connections to execute trades. API risks include:

• API connections may experience latency, timeouts, or failures that could delay or prevent trade execution
• Rate limits imposed by exchanges may restrict the number or frequency of trades that can be executed
• Changes to exchange APIs may temporarily or permanently affect the Platform's ability to interact with the exchange
• API key compromises could lead to unauthorized trading activity on your account

2.3 Downtime Risk

System downtime can occur for various reasons and may affect trading:

• Scheduled or unscheduled maintenance of the EulerX platform, the exchange, or underlying infrastructure
• Server outages, network failures, or distributed denial of service (DDoS) attacks
• Cloud infrastructure provider outages or service disruptions
• During downtime, open positions cannot be monitored or managed, potentially resulting in losses

2.4 Execution Risk

Trade execution may not always occur as expected:

• Orders may be partially filled, not filled at all, or filled at prices different from expected due to market conditions
• There may be delays between signal generation and trade execution, during which market conditions may change
• Slippage can occur, particularly for large orders or in volatile market conditions
• Network congestion may delay transaction confirmation

2.5 Security Risk

Despite our security measures, technology systems are inherently vulnerable to security threats:

• Cyberattacks, phishing, malware, or social engineering attacks may target your account or API keys
• Data breaches at third-party service providers could expose your information
• New and unforeseen security vulnerabilities may be discovered in the technologies we use
• Users are responsible for securing their own devices, networks, and credentials

3. Strategy & Performance Risks

3.1 Past Performance

Past performance is not indicative of future results. Historical returns, whether actual or backtested, do not guarantee future profitability.

• Backtested results are hypothetical and may not reflect actual trading conditions, including slippage, fees, and liquidity constraints
• Market conditions that produced past returns may not recur
• Strategies that performed well in the past may incur significant losses in the future

3.2 AI and Algorithm Limitations

Our AI-powered trading signals and algorithms have inherent limitations:

• AI models are trained on historical data and may not accurately predict unprecedented market events ("black swan" events)
• Models may experience degradation in performance over time as market dynamics change
• No algorithm can account for all possible market scenarios or external factors
• Signal accuracy varies across market conditions and is never guaranteed

3.3 Strategy Configuration Risk

Users configure their own trading strategy parameters, which carry risks:

• Inappropriate parameter settings (leverage, allocation, risk limits) may result in outsized losses
• Over-allocation of capital to a single strategy increases concentration risk
• Users may not fully understand the implications of certain parameter choices
• Default or suggested parameters may not be appropriate for every user's risk profile or financial situation

3.4 Drawdown Risk

All trading strategies are subject to drawdown periods:

• Drawdowns can be substantial and prolonged, potentially lasting weeks or months
• Maximum drawdown limits set by the user provide a safety mechanism but do not eliminate the risk of significant losses
• Recovery from drawdowns is not guaranteed and may take significantly longer than the drawdown period itself
• During drawdown periods, the emotional pressure to abandon a strategy may lead to poor decision-making

4. Regulatory & Compliance Risks

4.1 Regulatory Uncertainty

The regulatory environment for cryptocurrency and decentralized finance is uncertain and rapidly evolving:

• New laws or regulations could restrict or prohibit cryptocurrency trading, automated trading, or the use of services like EulerX in your jurisdiction
• Regulatory changes may occur without warning and may have retroactive effect
• The classification of cryptocurrencies as securities, commodities, or other regulated instruments varies by jurisdiction and may change

4.2 Tax Implications

Cryptocurrency trading may have significant tax implications:

• Tax treatment of cryptocurrency transactions varies by jurisdiction and is subject to change
• Automated trading may generate a high volume of taxable events that are complex to track and report
• You are solely responsible for determining your tax obligations and ensuring compliance with applicable tax laws
• EulerX does not provide tax advice and does not generate tax reports

4.3 Jurisdictional Restrictions

Access to or use of the Service may be restricted or prohibited in certain jurisdictions:

• It is your responsibility to ensure that your use of the Service is lawful in your jurisdiction
• We may be required to restrict access to the Service from certain jurisdictions without prior notice
• Changes in sanctions or embargo lists may affect your ability to use the Service

4.4 Exchange Regulatory Risk

The exchanges and platforms that EulerX connects to are also subject to regulatory risk:

• Exchanges may be shut down, restricted, or required to change operations by regulators
• Regulatory actions against an exchange could affect your access to funds or ability to trade
• Changes in exchange terms of service may affect how the Platform interacts with the exchange

5. Operational & Counterparty Risks

5.1 Exchange/DEX Risk

Your funds and positions reside on Hyperliquid DEX. Risks associated with the exchange include:

• Exchange insolvency, bankruptcy, or operational failure
• Exchange hacks, security breaches, or internal fraud
• Exchange suspension of trading, withdrawals, or deposits
• Changes to exchange fee structures, margin requirements, or trading rules
• Loss of funds due to smart contract vulnerabilities on the DEX

5.2 Infrastructure Dependencies

The Service depends on various third-party infrastructure components:

• Cloud service provider outages or performance degradation
• Internet connectivity issues between our servers and the exchange
• Blockchain network congestion or validator issues
• Third-party data provider outages or data quality issues

5.3 Business Continuity Risk

As with any business, there are risks related to the continued operation of EulerX:

• EulerX may cease operations, modify services, or be acquired
• Key personnel changes could affect the quality or continuity of the Service
• Financial difficulties could impact our ability to maintain or improve the Platform

6. Specific Strategy Risks

Different trading strategies available on the Platform carry different risk profiles:

• Trend-Following Strategies: May suffer significant losses during ranging or choppy markets; late entries and exits can reduce profitability; false breakouts can trigger losing trades
• Mean-Reversion Strategies: May incur substantial losses during strong trending markets; positions may move further against expectations before reverting; extended holding periods increase exposure risk
• Momentum Strategies: Susceptible to sudden momentum reversals; crowded trades may amplify losses during unwinding; high turnover leads to increased transaction costs
• Multi-Strategy Approaches: While diversification can reduce risk, correlated strategy losses during extreme market events can still result in significant drawdowns; complexity increases the potential for unexpected interactions between strategies

7. Risk Management Recommendations

While EulerX provides tools and features to help manage risk, the responsibility for risk management ultimately rests with you. We strongly recommend:

• Never invest more than you can afford to lose. Only use funds that you are financially and emotionally prepared to lose entirely.
• Start small and scale gradually. Begin with a small capital allocation and increase only after gaining experience and confidence in the platform and strategies.
• Use conservative leverage settings. Higher leverage increases both risk and potential losses. Start with lower leverage ratios.
• Set appropriate drawdown limits. Configure maximum drawdown thresholds to automatically pause trading when losses reach a predefined level.
• Diversify across strategies. Do not allocate all capital to a single strategy. Diversification can help reduce overall portfolio risk.
• Monitor your positions regularly. While trading is automated, you should regularly review your positions, performance, and risk exposure.
• Understand the strategies you use. Before deploying any strategy, make sure you understand how it works, its risk profile, and the market conditions under which it may underperform.
• Keep your API keys secure. Use minimal permissions, rotate keys periodically, and never share them with anyone.

8. Risk Acknowledgment & Acceptance

By using the EulerX platform, you acknowledge that you have read, understood, and accept all of the risks described in this Risk Disclosure document.

You specifically acknowledge and agree that:

• You are solely responsible for any trading decisions made using the Platform, whether automated or manual
• You understand that cryptocurrency trading involves substantial risk and that you may lose some or all of your invested capital
• You have sufficient knowledge and experience to evaluate the merits and risks of using an automated trading platform
• You are financially able to bear the loss of your entire investment without it adversely affecting your lifestyle or financial obligations
• You have sought independent financial, legal, and tax advice where appropriate before using the Service
• EulerX bears no responsibility for losses incurred through the use of the Platform

9. Regulatory Compliance Statement

EulerX operates as a technology platform providing automated trading tools. The following regulatory disclosures apply:

• EulerX is not a registered broker-dealer, investment advisor, or financial institution in any jurisdiction
• The Service is not intended to be offered to or used by persons in jurisdictions where such services are prohibited
• We do not provide personalized investment advice or recommendations
• Trading signals generated by the platform are based on algorithmic analysis and should not be considered as investment recommendations
• Users are responsible for ensuring that their use of the Service complies with all applicable laws and regulations in their jurisdiction

10. Important Disclaimers

11. Questions & Support

If you have any questions about the risks associated with using EulerX, or if you need clarification on any aspect of this Risk Disclosure, please do not hesitate to contact us:

This Risk Disclosure document was last updated on March 2, 2026. We may update this document from time to time to reflect changes in risks, regulations, or our services. We encourage you to review this document periodically.