Risks and Disclaimers

Spout is a financial protocol. Using it involves real money and real risk. Read this page and the Risks for Borrowers and Risks for Lenders pages before you use Spout.

Smart contract risk

Spout runs on Solana programs. They may contain undiscovered flaws, and an exploit could cause loss of funds. Audits reduce this risk but cannot remove it.

Market risk

Borrowers can be liquidated if collateral falls, and pay a penalty when they are. Lenders depend on the options strategy; in extreme cases losses can use up Junior and reach Senior.

Market hours risk

US stocks do not trade around the clock. Prices can gap at the open, and liquidations happen during market hours.

Oracle risk

Spout relies on external prices. A wrong or late price could cause a liquidation that should not happen, or miss one that should. Staleness checks and pauses reduce this risk but cannot remove it.

Liquidity risk

Lender withdrawals depend on the reserve, settlements and repayments. In stressed periods, withdrawals may wait in the queue, and Junior requires 45 days notice.

Counterparty risk

Tokenized stocks depend on their issuers. Once collateral joins a pool, the shares behind it are held in Spout's brokerage account, and calls trade and clear through that account.

Operational risk

Spout's services run options cycles and liquidations. Errors are designed to halt for human review, but delays or mistakes are possible.

Stablecoin risk

USDC carries issuer and peg risk, as it does anywhere.

Regulatory risk

Rules on tokenized securities and onchain lending are changing and differ by country. They could affect availability, legality or tax treatment.

Targets are not promises

Target yields and examples are illustrations. Past or modeled performance, including backtests, does not guarantee future results.

Not advice

Nothing in these docs or the app is investment, financial, legal or tax advice. Use Spout only with money you can afford to lose.