Risk Disclosures

Trading perpetual futures involves significant risks. Please read and understand these disclosures before using Rubicon.

General Risk Warning

Trading perpetual futures is highly speculative and involves a substantial risk of loss. You should only trade with funds you can afford to lose.

Leverage Risk

Amplified Losses

Leverage multiplies both gains and losses:

Leverage	5% Price Move	Your PnL
1x	-5%	-5%
2x	-5%	-10%
3x	-5%	-15%

At 3x leverage (maximum on Rubicon), a 33% adverse move loses your entire margin.

Liquidation

• Positions are forcibly closed when margin is depleted

• Liquidation can happen quickly in volatile markets

• You may lose your entire position

Recommendation

• Never use maximum leverage

• Understand your liquidation price before trading

• Use stop-losses to limit downside

Market Risk

Volatility

ETFs can experience significant price swings:

• Earnings announcements from major holdings

• Sector-wide news (chip supply, regulations)

• Macro events (rate decisions, economic data)

• Geopolitical events

Gap Risk

ETF prices can gap significantly at market open:

• Overnight news not reflected during closure

• Stop-losses may not protect against gaps

• Monday opens after weekend news

Liquidity Risk

• Spreads may widen during off-hours

• Large orders may experience slippage

• Thin order books during closures

Oracle Risk

Single Oracle Dependency

Rubicon operates its own oracle:

• You trust us to publish accurate prices

• Oracle errors could affect your positions

• No decentralized consensus mechanism

Price Source Failure

• Data providers may experience outages

• Stale prices used during fallback

• Extended outages may halt trading

Manipulation

While we implement safeguards:

• No system is perfectly manipulation-proof

• Price bands limit but don't eliminate risk

• Oracle operator theoretically has information advantage

Counterparty Risk

Hyperliquid

Your funds are held on Hyperliquid:

• Smart contract bugs could result in loss

• Platform downtime affects trading

• Regulatory actions could impact access

Rubicon

As oracle operator:

• Operational failures affect price feeds

• Business continuity risks

• No deposit insurance or guarantees

Technical Risk

Smart Contract Risk

• Bugs in Hyperliquid contracts

• Unforeseen interactions

• Upgrade risks

Infrastructure Risk

• Server outages

• Network congestion

• API failures

Key Management

• Lost private keys = lost funds

• Compromised keys = stolen funds

• No recovery mechanism

Regulatory Risk

Legal Uncertainty

• Crypto regulations evolving rapidly

• Perpetuals may face restrictions

• Geographic limitations may apply

Access Risk

• Certain jurisdictions may be restricted

• Regulations may change

• Platform may become unavailable

Auto-Deleveraging (ADL) Risk

What is ADL?

Auto-deleveraging (ADL) occurs when the insurance fund cannot cover losses from liquidated positions. In such cases, profitable traders may have their positions automatically closed to maintain system balance.

HIP-3 Specific Risk

IMPORTANT: Markets deployed via HIP-3 (including all Rubicon markets) are NOT backstopped by the Hyperliquid Liquidator Vault. This means:

• Higher likelihood of ADL events compared to native Hyperliquid markets

• Profitable positions can be closed without warning

• You may lose unrealized gains during volatile periods

• No insurance fund protection

When ADL Occurs

ADL is triggered when:

• A position is liquidated but there's insufficient liquidity to close it

• The counterparty losses exceed available insurance

• Extreme market volatility causes cascading liquidations

ADL Priority

Traders are ranked for ADL based on profit and leverage. Higher-profit, higher-leverage positions are deleveraged first.

Mitigation

• Take profits regularly rather than holding indefinitely

• Use smaller position sizes

• Monitor market volatility and ADL indicators

• Be aware that winning positions are not guaranteed

Funding Rate Risk

Costs of Holding

• Funding payments can be significant

• Rates can change rapidly

• Extended holds accumulate costs

Rate Example

Position: $10,000
Funding: 0.05% per 8 hours
Daily cost: 0.15% = $15
Monthly: ~$450

Specific ETF Risks

SOXX (Semiconductor ETF)

• Concentrated in volatile tech sector

• Sensitive to earnings of major holdings

• Supply chain disruptions impact valuations

Korean ETFs

• Currency risk (KRW/USD fluctuations)

• Different market hours

• Geopolitical sensitivity (North Korea)

What This Means for You

Before Trading

1. Understand the product — How perps work, funding, liquidation

2. Know your risk — Only trade what you can afford to lose

3. Have a plan — Entry, exit, stop-loss before trading

While Trading

1. Monitor positions — Especially with leverage

2. Watch funding — Can erode profits

3. Manage overnight risk — Consider closing before market close

Risk Limits

Consider personal limits:

• Maximum position size

• Maximum leverage used

• Maximum loss before stopping

No Guarantees

Rubicon makes no guarantees regarding:

• Profitability of trading

• Accuracy of oracle prices

• Uptime of the platform

• Protection against losses

Acknowledgment

By using Rubicon, you acknowledge:

• You have read these risk disclosures

• You understand the risks involved

• You are trading at your own risk

• You can afford to lose your trading capital

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This is not financial advice. Consult a financial advisor if unsure whether leveraged trading is appropriate for you.