Understanding Crypto Risks
Before staking, understand the risks involved.
**Market Risk**
• Crypto prices are highly volatile
• Your staked assets can lose value even while earning rewards
• A 10% APY means nothing if the token drops 50%
**Platform Risk**
• Exchanges and platforms can be hacked
• Companies can become insolvent
• Smart contracts may have vulnerabilities
**Slashing Risk**
• In PoS, validators can lose stake for misbehavior
• Even delegators can be affected
• Different protocols have different rules
**Regulatory Risk**
• Governments may restrict crypto activities
• Tax laws can change
• Some platforms may block users from certain regions
**Opportunity Cost**
• Locked assets can't be traded
• You might miss better opportunities
• Liquidity has value
Understanding risks is the first step to managing them.