This Risk Disclosure is provided for informational purposes only to highlight certain risks of using 40acres.Finance. It supplements, and does not replace, the Terms of Service. In the event of any conflict between this Risk Disclosure and the Terms of Service, the Terms of Service control.
IMPORTANT RISK SUMMARYThe 40acres Finance platform and all related services are experimental technologies provided “AS IS.” They may carry significant risks including but not limited to:
- Bugs, vulnerabilities, or failures in smart contracts or the underlying blockchain
- Partial or total and irreversible loss of digital assets from exploits, cyberattacks, or wallet compromise
- Loan repayment is entirely dependent on the continued revenue generation of the underlying DEX protocol issuing your collateral - if that protocol stops generating fees, self-repayment stops
- No insurance, guarantee, or compensation is provided by any party associated with this platform
- Regulatory, tax, or legal risks may apply depending on your location
Do not use this platform unless you fully understand and accept these risks. 1. Disclaimer of Warranties
The 40acres Finance platform, including the website, application, and all integrated third-party protocols and services, is experimental and is provided “AS IS” and “AS AVAILABLE.” The Operator makes no warranty, express or implied, regarding the platform or its use, including:
- That the platform or any related software will be free from defects, vulnerabilities, bugs, or security breaches
- That the platform will be available without interruption
- Any implied warranties of merchantability, fitness for a particular purpose, or non-infringement
2. Self-Repayment & Underlying Protocol Risk
This is the most important risk specific to 40acres Finance and should be understood before borrowing.
40acres loans are self-repaying, but only if your collateral continues to generate revenue.
When you deposit a revenue generating asset as collateral to 40acres and borrow USDC, your loan is repaid automatically each epoch using the rewards generated by your collateral. This mechanic depends entirely on the underlying protocol that issued your asset (Aerodrome, Velodrome, Pharaoh, Blackhole, etc) continuing to generate trading fees and distribute epoch rewards.
If the underlying protocol experiences a decline in trading volume, governance changes, or a catastrophic failure, epoch rewards may decrease significantly or stop entirely. In this scenario, your loan will not self-repay or will repay much more slowly than expected. Your collateral remains locked until the loan is repaid in full.
Specific risks to understand:
Revenue variability: Epoch rewards are not fixed. They fluctuate weekly based on trading volume, liquidity depth, and voting incentives on the underlying protocol. A sustained period of low rewards will extend your loan repayment timeline significantly.
Protocol failure: If a protocol that 40acres supports ceases operations, is exploited, or stops distributing rewards, outstanding loans backed by that protocols collateral become effectively un-repayable through the self-repayment mechanism. The vault absorbs the resulting bad debt. This is a real risk - analogous to risks that have materialized in similar DeFi lending protocols.
Voting optimizer dependence: 40acres uses a vote optimizer to maximize epoch rewards on your behalf. If the optimizer underperforms, votes for low-yielding pools, or experiences a technical failure, rewards - and therefore repayment speed, may be lower than expected.
Loan duration extension: There is no fixed repayment timeline. If rewards decrease, your loan simply takes longer to repay. Your collateral remains locked for the duration. You should only borrow amounts you are comfortable having outstanding for an extended and uncertain period.
3. Smart Contract Risk
The 40acres protocol consists of autonomous smart contracts deployed on public blockchain networks. These contracts have been audited by independent security researchers. Audit reports are available on the Audits & Security page.
However, an audit does not guarantee the absence of bugs or vulnerabilities. Smart contracts may contain undiscovered flaws, design errors, or coding mistakes that could result in the partial or total loss of digital assets. Exploits may be discovered at any time, and the operator cannot guarantee the security of funds at rest in the protocol.
The User assumes all risk associated with the use of the platform regardless of audit status.
4. Third-Party Protocol Risk
40acres Finance integrates directly with external protocols (Aerodrome, Velodrome, Pharaoh, Blackhole, etc) and their underlying smart contract infrastructure. These protocols are developed, operated, and maintained by independent third parties that the operator does not control.
Changes to these protocols - including governance decisions, fee structure changes, contract upgrades, or exploits - may materially affect the performance of your collateral and the self-repayment of your loan. The operator is not responsible for the actions, failures, or decisions of any third-party protocol.
5. Blockchain Risk
Transaction finality: All blockchain transactions are final and irreversible. The operator cannot cancel, reverse, or recover any transaction.
Network congestion: Blockchain networks may experience congestion, delays, or elevated gas costs that affect the claiming of epoch rewards, loan repayments, or other protocol operations.
Multi-chain risk: 40acres operates across multiple chains (Base, Optimism, Avalanche). Each chain carries its own operational, security, and consensus risks. A failure on one chain does not affect positions on other chains, but each chain’s risks are borne independently by the user.
Forks and chain changes: Underlying blockchain networks may undergo hard forks or protocol-level changes that affect the operation of smart contracts deployed on them.
6. Wallet & Custody Risk
40acres Finance is a non-custodial protocol. The operator does not hold, manage, or control your digital assets or wallet credentials.
You are solely responsible for safeguarding your private keys, seed phrases, and wallet access. Loss or compromise of wallet credentials may result in the permanent and unrecoverable loss of your assets. No recovery mechanism exists.
7. Stablecoin Risk
All loans on 40acres Finance are denominated in USDC. A significant de-peg of USDC from its $1.00 peg would affect both borrowers and vault depositors. The operator does not guarantee the stability of USDC or any other digital asset.
8. Market Risk
Digital assets are highly volatile. The value of your collateral - and the governance tokens that generate your epoch rewards (AERO, VELO, etc.) - may fluctuate significantly. A decline in the value of these tokens does not trigger liquidation, but may reduce the USD-denominated value of rewards flowing toward loan repayment.
Past reward rates are not indicative of future performance.
9. Regulatory Risk
The legal and regulatory status of DeFi protocols, digital assets, and blockchain technology is uncertain across many jurisdictions and subject to change. Changes in law or regulatory enforcement could restrict or prevent your use of the platform. You are solely responsible for ensuring your use of this platform complies with applicable laws in your jurisdiction.
Transactions involving digital assets may trigger tax obligations. The operator does not provide tax advice and is not responsible for your tax compliance.
10. No Insurance or Government Backing
Digital assets and transactions made through the 40acres Finance platform are not protected by any deposit insurance scheme, government-backed program, or regulatory authority. You may lose some or all of your deposited assets with no recourse.
11. Mitigation Measures
40acres Finance has implemented the following risk mitigation measures:
- Smart contracts audited by independenta security researchers (view audits)
- 80% vault utilization cap - no new loans can originate if the vault exceeds 80% utilization, protecting depositors from over-extension
- Multi-DEX and multi-chain diversification to reduce concentration risk
- Non-liquidating loan structure to prevent forced asset sales
These measures reduce but do not eliminate risk. The User assumes all risk of loss regardless of their implementation.
This disclosure does not constitute financial, legal, or professional advice. Conduct your own due diligence before using this platform. 