# Risks

At Yei Finance, while we strive to offer robust financial tools and returns, it's crucial to acknowledge and understand the inherent risks associated with using our lending protocol:

* **Market Risks:** The crypto market is volatile; significant price fluctuations can affect the value of collateral and the stability of your investments.
* **Liquidity Risks:** There might be instances when liquidity is low, and you are unable to withdraw your assets immediately, particularly when the pool's utilization is high.
* **Liquidation Risks:** If the market value of your collateral falls below the required threshold (Health Factor below 1), your assets may be liquidated to cover the loan, potentially leading to losses.
* **Smart Contract Risks:** While our platform is built on thoroughly audited smart contracts, there is always a risk of undiscovered vulnerabilities.
* **Regulatory Risks:** Changes in cryptocurrency regulations could affect the operations of DeFi platforms, including Yei Finance.

While Yei Finance strives to minimize risks, no platform is entirely risk-free. Key concerns include potential smart contract bugs and the risk of collateral liquidation. Our commitment to transparency, open-source code, and comprehensive audits are central to our risk mitigation strategy.