Strategy risks

DeFi Strategy Risk

The onchain yield is generated by deploying capital into various strategies through Blend's coordination system.

This introduces risks from 3rd party protocol’s smart contract vulnerabilities, risk of impermanent loss, or sudden yield changes. A single point of failure in our partner protocols could lead to significant loss of funds, directly impacting USX peg (or value).

Security & Due Diligence

Blend’s infrastructure: USX protocol deploys capital across curated onchain yield strategies through Blend that include lending markets, tranching systems, and liquidity venues. Each strategy executes through Blend’s non-custodial coordination layer, which automates allocation, rebalancing, and risk enforcement according to defined policy.

Capital remains signer-bound within individual Safes, ensuring isolation while Blend manages cross-chain execution and delta-neutral balance. This structure allows USX to operate as a unified savings protocol on top of Blend’s neutral automation network.

Blend has undergone comprehensive security audits with reports available at https://docs.blend.money/resources/audits.

Mitigation Measures:

• Strategy diversification across multiple uncorrelated DeFi protocols to prevent single points of failure.

• Rigorous protocol due diligence including comprehensive code reviews and audit verification.

• Dynamic rebalancing with continuous monitoring and capital reallocation based on risk/reward profiles.

• Position limits capping allocation to any single strategy to minimize potential losses.

Hedge Funds risk

The protocol's tradfi yield strategy depends on partnered hedge funds. The funds’ failure, poor performance, or operational issues could result in loss of deployed capital and impact USX backing assets.

Mitigation Measures:

• Comprehensive due diligence on fund's financials, track record, and risk management practices

• Strong legal agreements with clear asset ownership, withdrawal rights, and reporting requirements.

• Regular independent third-party audits to verify asset existence and reported performance. These reports will be made available to the public.

For our full risk disclosure statement, please refer to important legal disclosures and risk disclaimers.