KIVOT was designed as a citadel of decentralization and autonomy, a protocol whose mechanics operate entirely by code, without human intervention or the need for false promises. We achieved this by eliminating internal risks—rug pulls, centralized control, speculative dependence.
However, nothing in the digital world is absolutely invulnerable, especially when operating within a larger ecosystem. KIVOT, like any other decentralized project, is subject to external risks that are beyond its control or design. It’s crucial to be fully transparent about these potential threats to maintain a realistic perspective on its long-term future.
Here are the main factors that could affect or even destroy KIVOT, and which are beyond the protocol’s control:
1. Cessation or Disappearance of the Polygon Blockchain
KIVOT is built and operates on the Polygon blockchain. This means that its functionality is directly tied to the health and operability of this underlying blockchain.
- What the Risk Is: If the Polygon blockchain completely ceases to function, suffers an irreversible critical error, is attacked and compromised to the point of unusable, or disappears for any other reason, then KIVOT would also cease to exist in its current form. The protocol cannot operate without the foundational infrastructure upon which it is deployed.
- Why It Doesn’t Depend on KIVOT: The health and development of the Polygon blockchain (or any other L1/L2) are managed by its developers, validators, and community. KIVOT has no control over these processes. Although Polygon is an established and large-scale network, the risk of an existential failure, while small, always exists for any blockchain.
2. Bug or Exploit in KIVOT’s Code
KIVOT is designed with maximum simplicity and security, and its code is public. Nevertheless, the probability of a bug, no matter how small or negligible it may seem, can never be completely ruled out for any software product.
- What the Risk Is: Even the most well-audited and simplest code can contain a hidden error (bug) or vulnerability (exploit) that could be discovered and maliciously exploited. Such a bug could compromise the protocol’s integrity, disrupt the functioning of the Eternal Pool, or allow funds to be drained.
- Why It Doesn’t Depend on KIVOT: KIVOT is autonomous, and its code is immutable after deployment. This means that if a bug is discovered, there is no mechanism for a “patch” or update to the protocol, other than potentially launching an entirely new, corrected version. This risk is inherent to all immutable smart contracts. The risk is minimized through simplified design and potential audits, but it is not zero.
3. Problems with the Dollar Token (USDC)
KIVOT’s Eternal Pool is based on a KIVOT/USDC pair. USDC is one of the largest and most regulated stablecoins, but it is still a centralized stablecoin issued by Circle.
- What the Risk Is: If USDC loses its peg to the US dollar for an extended period, or if Circle (the company behind USDC) experiences regulatory issues, bankruptcy, censorship, or other existential threats, this would directly impact the value of liquidity in the Eternal Pool. Although the pool would continue to function, the value of its USDC component would be compromised.
- Why It Doesn’t Depend on KIVOT: KIVOT has no control over the issuer of USDC, its reserves, or the regulatory oversight it is subject to. This is a risk inherent to any crypto ecosystem that relies on fiat-backed stablecoins.
4. Unknown Regulatory Risks
The regulatory landscape in the crypto space is still evolving and largely unclear in many jurisdictions.
- What the Risk Is: Potential future regulations could impose restrictions on the use of decentralized protocols, stablecoins, or even make the use of certain tools illegal. Although KIVOT is fully autonomous and has no centralized team to “pursue,” regulatory bans could limit user access to it or create legal obstacles to its use.
- Why It Doesn’t Depend on KIVOT: The protocol has no control over the legislative processes of any country or supranational body. Regulations are an external factor that can affect the entire DeFi space.
Conclusion: Strength in Autonomy, Understanding the Risk
It is important to emphasize that the risks listed above are external and do not depend on KIVOT’s design or execution. KIVOT is built to eliminate all internal risks that can be controlled through code and decentralization.
Holders and users of KIVOT should be aware that while the protocol offers unprecedented autonomy and security, it still operates within a dynamic and unpredictable digital and regulatory environment. Understanding these external risks is crucial for anyone interacting with any decentralized asset. KIVOT stands as a testament to the power of code, but it cannot control the entire world around it.
