> For the complete documentation index, see [llms.txt](https://docs.useicaria.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.useicaria.xyz/risk/framework.md).

# Risk framework

Each material risk the venue carries, named alongside whoever bears it and whatever contains it.

Real-world assets bring real-world risk with them. The only honest reaction is to enumerate those risks, say who ends up holding each one, and write down what limits it. That enumeration is this section. Anything that belongs here and is not here counts as a documentation bug, and we would like to hear about it.

## The map

| Risk                            | Borne by                         | Mitigation                                                                        | Detail                                                   |
| ------------------------------- | -------------------------------- | --------------------------------------------------------------------------------- | -------------------------------------------------------- |
| Oracle failure or manipulation  | LPs, traders                     | Guards, staleness bounds, cross-checks, the band, halts                           | [Oracles and market sessions](/risk/oracles.md)          |
| Weekend and overnight gaps      | LPs                              | Closed-regime spread multipliers and smaller clips                                | [Trading regimes](/protocol/trading-regimes.md)          |
| Issuer credit and freeze rights | Everyone holding a Stock Token   | Disclosure, bytecode review, tier caps, a published single-issuer exposure figure | [Issuer risk](/risk/issuer.md)                           |
| Sequencer outage or censorship  | LPs, and traders caught mid-flow | A recovery grace period, forced inclusion via L1, and halts                       | [Sequencer and chain risk](/risk/sequencer-and-chain.md) |
| Contract bugs                   | Everyone                         | Audits, invariants, a bounty, guarded caps, almost no upgradeability              | [Security programme](/architecture/security.md)          |
| Adverse or toxic flow           | LPs                              | Bands on inventory, pricing that reads skew, one-sided quoting and clips          | [Anchor vaults](/protocol/anchor-vaults.md)              |
| Quote-asset depeg               | Everyone                         | A native issuer regulated under MiCA; disclosed as a concentration                | [Quote asset: USDG](/assets/usdg.md)                     |
| Parameter error                 | LPs, traders                     | Timelock, published rationale, the band as backstop, guarded caps                 | [Parameter governance](/transparency/governance.md)      |
| Maker misbehaviour              | Takers                           | Signature checks, expiry, nonces, the band, attestation revocation                | [RFQ settlement](/protocol/rfq.md)                       |
| Regulatory change               | The venue                        | A boundary that a parameter can tighten, access gated by jurisdiction             | [Compliance model](/compliance/model.md)                 |

## Where most failures come to rest

Most of the failures above end up stopping at the oracle band. Whatever has gone wrong upstream (a parameter set badly, a maker key stolen, a quote routed incorrectly), no fill lands further from the last guarded oracle price than the band permits. A long list of tail scenarios thereby collapses into a bounded cost per fill, and that is what gives the guarded launch caps any meaning: worst case becomes something you calculate rather than something you hope about.

## What is left uncovered

Part of the framework is being clear about what is left over:

* **Market risk.** Buy tokenized NVDA and you own NVDA exposure. Transactions are what the venue prices; positions are not something it insures.
* **Issuer insolvency.** Caps and disclosure make the exposure visible and bounded. Neither makes it go away.
* **A correct oracle reporting a violent market.** Staleness, pauses and implausible jumps trigger halts; genuine volatility never does. A crash passes through this venue exactly as it passes through the underlying.

## Keeping this section current

Wherever an incident lands on the map above, it gets a public post-mortem and, where the evidence supports one, a parameter or design change through the timelock. Industry incidents and this venue's answer to each are collected in [Lessons from RWA trading](/risk/lessons.md); the intention is that Icaria's own record gets held to that same standard.


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