Risks

Missing data pays HOLD

If an interval is not reported by its deadline, anyone can skip it with zero accrual. There is no backfill, no governance override and no fallback price. An outage at the reporters, the RPC provider or the pools during a depeg reduces what BREAK is paid, precisely when it matters. The BREAK holder accepts data-availability risk.

Reporters are trusted, not proven

The program verifies signatures, sequence and bounds. Two colluding reporters can submit a false discount within the allowed range. Three keys operated by one party are not decentralization. Before funding, look at the reporter keys and the policy hash on the series page and decide whether you trust that set. Reporter tooling replays evidence before signing, but an RPC snapshot is not a cryptographic proof of chain state.

The price is sampled

Pools are read every 15 seconds and averaged over five minutes; the deductible and cap apply to the average. A spike between samples can be missed, and two paths with the same continuous area can settle differently. See Price and reporters.

Net asset value is not covered

BREAK pays on the gap between market price and reported net asset value. If the pool's SOL is slashed, if the issuer's state is wrong, or if net asset value and market price fall together, there is no payout. Unpeg is not insurance on the staking token.

Pools can be thin or manipulated

A concentrated-liquidity pool with little active liquidity can be moved cheaply. Approving a pool requires measuring the cost of moving its five-minute average against the series' total exposure; no market is approved until that is done. Two pools on the same DEX program also share that program's failure modes.

No guaranteed exit

The order book is a set of escrow sell offers. Nobody is obliged to buy your note at any price, and an offer's price is not fair value. Before settlement, the only guaranteed way out is to merge a complete pair. An expired offer keeps your notes in escrow until you cancel it.

Software and deployment

The program has been tested against its compiled binary but has not been independently audited, and no program is deployed today. When one is, its upgrade authority is a separate trust surface that must be disclosed. Series creation is permissionless: a valid-looking series account is not an endorsement. Check the program id, market and reporters shown by the app rather than trusting an address.

Costs you pay separately

Solana transaction fees, rent for new token accounts, SOL wrapping, and any priority fee come out of your wallet on top of premium and collateral. Skipping and finalizing are permissionless, and whoever sends those transactions pays their fees.

Auditability depends on archives

The chain keeps a rolling hash of the interval history, not the history itself. Operators must archive the emitted events and raw evidence; if they lose them, balances and payouts remain correct on chain but the reasoning behind a given interval's discount can no longer be replayed.