Disclaimer

Considerations

Users are encouraged to research and carefully consider their risk tolerance before depositing SOL or LST-SOL into $btcSOL and accumulating zBTC or BTC. Users must bear losses caused by price fluctuations if there are losses in the SOL asset during the investment period.

The yield channels involve various on-chain portfolios, which may carry the risk of failure from the projects.

Platform Security

While btcSOL implements robust security measures to protect user assets, users are responsible for ensuring the security of their wallets and understanding the risks involved in participating in decentralized finance. btcSOL is not liable for losses resulting from market volatility, smart contract vulnerabilities, or user errors, including wallet security lapses.

btcSOL employs a range of security measures to ensure the safety of its platform and users:

• Smart Contract Integrity: The platform's smart contracts are audited to reduce vulnerabilities, ensuring secure SOL or LST-SOL deposit and withdrawal processing.
• Decentralized Authorization: $btcSOL minting and SOL or LST-SOL redemption requests are authorized through a decentralized mechanism, minimizing the risk of centralized control or manipulation.
• Data Encryption: Sensitive data and transaction details are encrypted, providing an additional layer of protection.

Website Security

The btcSOL website implements various security measures to protect users and their data:

• SSL Encryption: All data exchanged between users and the website is encrypted using SSL, ensuring privacy and protection against unauthorized access.
• Authentication Protocols: Users must authenticate via secure wallets, ensuring safe interactions without exposing sensitive information.
• Regular Audits: The website is regularly monitored and audited to detect and address potential security vulnerabilities promptly.

SOL or LST-SOL Custody & Asset Security

When you deposit SOL or LST-SOL into $btcSOL, your assets are secured using a permissionless reserve mechanism. Key security principles include:

• btcSOL as the Sole Withdrawal Certificate: btcSOL only recognizes $btcSOL as the valid proof of SOL or LST-SOL custody. $btcSOL is a non-transferable LST derivative token that cannot be transferred between wallets. Holding $btcSOL is the only requirement to withdraw 1 $btcSOL **≈** 1 SOL, subject to standard withdrawal conditions.
• Price Index: The Price Index determines how much $btcSOL you receive based on the value of SOL and LST-SOL. The Price Index fluctuates based on market prices of SOL and LST-SOL, rather than being controlled by the system.
• User Ownership & Control: btcSOL is fully non-custodial. No central party can unilaterally access or manage user assets. Only the rightful holder of $btcSOL has the ability to initiate withdrawals.

Cross-Chain Risks

Accumulating zBTC or BTC will involve interacting with cross-chain systems, which always involves additional layers of risk:

• Withdrawal Delays: SOL or LST-SOL withdrawal processing may take time due to security checks and decentralized coordination.
• Network Coordination: System performance may be impacted by the reliability of decentralized actors responsible for cross-chain validation.
• Bridge Risks: Any cross-chain operation carries risks of smart contract bugs, economic exploits, or consensus failures.

Yield Algorithm Risks

If you choose to earn yield on your deposited SOL or LST-SOL (e.g., converting to $btcSOL and accumulating zBTC or BTC for use in DeFi), you should be aware of the following risks:

• Variable Yield Rates: Yield rates may vary depending on factors like network saturation, SOL or LST-SOL utilization rate, and market demand.
• Utilization Risk: If the deposited SOL or LST-SOL is over-utilized or underutilized in DeFi protocols, it may impact returns.
• Protocol Misalignment: In rare cases, mismatched incentives across protocols could reduce or negate rewards.
• Minimum Position: Due to Bitcoin's decimal place limitations, positions smaller than 1 $btcSOL may not accumulate enough zBTC. To accumulate BTC-dominated assets, maintain a position of at least 1 $btcSOL.
• Early Unstaking Fee: The system operates on a one-day cycle (00:00–23:59 UTC) for zBTC accumulations. Unstaking shortly after claiming your accumulations at 00:00 UTC may trigger an early unstaking fee. This occurs because unstaking mid-cycle prevents you from receiving that day's accumulations, potentially resulting in a loss.

Wallet Security Risk

When using btcSOL, it's crucial to ensure your wallet is secure. While the SOL or LST-SOL custody mechanism does not grant any third-party control over your private keys, you are responsible for:

• Protecting Private Keys: Loss of private keys could result in complete loss of access to your SOL, LST-SOL, $btcSOL, zBTC, or BTC.
• Avoiding Scams: Be cautious of phishing attempts or malicious dApps imitating btcSOL.

Asset Risks

Depositing SOL or LST-SOL into $btcSOL and participating in DeFi carries inherent risks:

• Market Volatility: SOL or LST-SOL's value can fluctuate significantly, which may impact the value of any derived assets (e.g., $btcSOL).
• Liquidity Risks: In extreme cases, liquidity shortages could temporarily affect redemption and withdrawal processes.
• Network Risks: Solana or Bitcoin network congestion or instability may impact transaction success or timing.

Jurisdiction Notice

Access to btcSOL is not permitted for users located in certain jurisdictions due to internal compliance policies and applicable regulatory considerations. This includes, but is not limited to:

• United States
• Canada
• Netherlands
• Cuba
• Iran
• Syria
• Taiwan (Republic of China)
• Democratic People's Republic of Korea (DPRK)
• Crimea region and any non-government-controlled areas of Ukraine

btcSOL may update this list from time to time at its sole discretion. Users are responsible for ensuring that their access and use of the platform complies with all applicable laws and regulations in their jurisdiction.