Risk Disclosure Statement

For any questions, join the Edel Finance Discord, and reach out to contributors. Last Updated: 9 September 2025
The following Risk Disclosure Statement is intended to inform you (“User”) of the potential risks associated with interacting with the Edel Finance Platform (“Platform”), which operates within the decentralised finance (DeFi) sector. By engaging with the Platform, Users acknowledge, understand, and accept the risks outlined below. This statement does not cover all possible risks, and Users are encouraged to consult with financial, legal, and technical advisors before using the Platform.

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1. General Platform Risks

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Decentralised Finance and Blockchain Risks

The Platform operates on a blockchain-based infrastructure, which may expose Users to specific risks associated with blockchain technology and DeFi protocols. These risks include but are not limited to potential issues with smart contracts, decentralised governance, transaction finality, and blockchain network reliability. Users should understand that blockchain-based services differ significantly from traditional finance and are still in a developmental stage.

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Platform “As-Is” Basis

The Platform and its services are provided on an “as-is” and “as-available” basis, without any warranties, express or implied. The Platform makes no guarantees regarding functionality, performance, reliability, security, or accuracy, and disclaims any liability for losses or damages arising from service unavailability or performance issues.

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2. Financial and Market Risks

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Market Volatility

The value of digital assets, tokenized stocks, and Real World Assets (RWAs) is subject to extreme volatility. Price fluctuations in crypto-assets, tokenized securities, and collateral values may occur suddenly and without warning, leading to substantial and unpredictable changes in the value of User holdings. Users should be prepared for rapid changes in market conditions that could affect the performance of transactions conducted on the Platform.

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Liquidation and Collateral Risks

Users engaging in borrowing activities must monitor their collateral levels and Health Factor carefully. Failure to maintain sufficient collateral may result in automatic liquidation when the Health Factor drops below 1.0, leading to partial or total loss of the User’s collateralised assets without recourse. Liquidation can occur due to collateral value decreases, accrued interest on borrowed amounts, or a combination of both factors.

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Liquidity Risks

Digital asset markets, including those involving tokenized stocks, RWAs, and the Platform’s supported assets, may experience low liquidity. Limited liquidity can prevent Users from exiting positions or converting assets in a timely manner, potentially resulting in financial losses. Users should consider their ability to manage positions in low-liquidity conditions.

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Tokenized Securities and RWA Risks

The Platform enables lending and borrowing of tokenized stocks and Real World Assets, which carry additional risks including:

• Price correlation with underlying traditional securities
• Regulatory changes affecting tokenized asset validity
• Bridge or custodian risks for underlying asset backing
• Settlement timing differences between traditional and tokenized markets
• Potential depegging from underlying asset values

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3. Technology and Security Risks

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Smart Contract Risks

The Platform relies on smart contracts deployed on the Ethereum blockchain, built on the Aave V3 architecture. While the Platform leverages battle-tested and extensively audited smart contracts, vulnerabilities or coding errors may still exist. Users acknowledge that interactions with smart contracts are at their own risk, and the Platform is not liable for losses resulting from smart contract malfunctions, coding errors, or exploits.

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Oracle Risks

The Platform relies on Chainlink’s decentralized oracle network and other oracle services to provide accurate price feeds for assets. Oracle failures, manipulation, or temporary unavailability could result in incorrect asset valuations, potentially triggering unwarranted liquidations or preventing normal protocol operations.

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Cybersecurity Risks

The Platform may be exposed to cybersecurity threats, including but not limited to hacking, phishing, denial-of-service (DoS) attacks, and other forms of unauthorised access. Despite the implementation of industry-standard security protocols, Users recognise that no platform is immune to security breaches. Any unauthorised access to User accounts or transactions may result in financial loss, and Users are advised to employ strong security practices, including protecting private keys and using secure wallet providers.

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Blockchain Network Risks

The Platform operates on the Ethereum blockchain, which is subject to network-specific risks, including congestion, high transaction fees, potential downtime, and network reorganisation. Users should understand that blockchain network conditions may impact the timeliness, cost, and success of transactions on the Platform. The Platform disclaims responsibility for any losses arising from blockchain network-related issues.

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Irreversibility of Transactions

Blockchain transactions executed on the Platform are final and cannot be reversed once confirmed. Users are solely responsible for verifying transaction details before confirming them, as the Platform cannot alter or cancel transactions once submitted.

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4. Regulatory and Legal Risks

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Evolving Legal and Regulatory Landscape

The legal and regulatory environment surrounding DeFi platforms, crypto-assets, tokenized securities, and RWAs is rapidly evolving and may vary significantly across jurisdictions. Users should be aware that future regulatory actions could adversely affect their ability to use the Platform or hold certain assets. The Platform disclaims liability for losses or legal consequences arising from changes in laws, regulations, or regulatory interpretations affecting the Platform or its Users.

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Securities Law Compliance

The Platform’s focus on tokenized stocks and securities lending markets may subject Users to additional regulatory requirements. Users are responsible for ensuring their activities comply with applicable securities laws in their jurisdiction, including but not limited to registration requirements, disclosure obligations, and investment restrictions.

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Jurisdictional Restrictions

The Platform may restrict access to Users in certain jurisdictions where the use of crypto-assets, tokenized securities, or DeFi platforms is prohibited or highly regulated. Users are responsible for understanding and complying with the legal requirements of their jurisdiction before using the Platform. The Platform reserves the right to implement restrictions based on Users’ location as required to comply with applicable regulations.

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Tax Obligations

Users are solely responsible for determining and fulfilling their tax obligations related to transactions conducted on the Platform, including those involving tokenized securities and RWAs. The Platform does not provide tax advice, and Users are advised to consult with tax professionals to understand and comply with their local tax laws.

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5. User Responsibility and Knowledge Assumption

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User Diligence

Users are expected to conduct independent research and due diligence before engaging with the Platform. Users should understand the functionality and risks of DeFi platforms, smart contracts, blockchain technology, digital assets, tokenized securities, and RWAs. The Platform is not liable for losses resulting from the User’s lack of knowledge or understanding of these subjects.

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No Financial Advice

The Platform does not provide investment, financial, legal, or tax advice. All information available on the Platform is for informational purposes only. Users are encouraged to seek professional advice before making any financial decisions or engaging in transactions on the Platform.

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Self-custody and Private Key Management

Users are solely responsible for the custody and security of their blockchain-based wallets and private keys. The Platform does not store, control, or manage private keys on behalf of Users. Loss of a private key or access credentials may result in the permanent loss of crypto assets, and the Platform is not responsible for any such loss.

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6. Operational Risks

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Platform Stability

As a decentralised platform, Edel Finance is subject to operational risks that may impact service availability. Maintenance, upgrades, or unexpected technical issues may temporarily disrupt the availability of Platform services. The Platform disclaims responsibility for losses incurred due to downtime, maintenance periods, or other interruptions in service.

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Third-Party Service Dependencies

The Platform may depend on third-party providers for wallet integration, blockchain infrastructure, oracle services, analytics, and tokenized asset custody/bridging services. Disruptions in these services could affect Platform functionality and User experience. Users acknowledge that the Platform is not liable for any losses caused by third-party service failures.

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Forks and Protocol Changes

Blockchain networks are subject to potential forks, upgrades, or changes to the underlying protocol. These events could impact the functionality, value, or accessibility of assets on the Platform. The Platform is not liable for losses arising from network forks, protocol changes, or incompatibility issues following such events.

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7. Specific Risks Related to Platform Architecture and Development

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Aave V3 Protocol Foundation

Edel Finance is built on the Aave V3 architecture, leveraging battle-tested smart contracts for overcollateralized lending and borrowing. While this provides proven infrastructure, Users should understand that any modifications or customizations to the base protocol may introduce unforeseen risks, including vulnerabilities or deviations from the original protocol’s intended functionality. The Platform disclaims liability for losses arising from protocol modifications.

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Governance and Decision-Making

Edel Finance may implement a decentralised or community-based governance model, wherein token holders may vote on or propose changes to the Platform. Governance changes may affect Platform features, fees, risk parameters, and other operational aspects, which may in turn impact Users’ positions. Users acknowledge that governance outcomes are determined by token-holder votes and may not always align with individual interests.

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Risk Parameter Adjustments

The Platform’s risk management framework includes dynamic risk parameters that can be adjusted through governance or automated systems to respond to changing market conditions. Changes to Loan-to-Value ratios, liquidation thresholds, interest rate models, and supply/borrow caps may affect existing positions and future Platform interactions.

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Updates and Feature Changes

The Platform may introduce new features, integrate additional assets, or make updates to existing functionality. Users should be aware that new updates may alter the Platform’s functionality and risk profile. The Platform reserves the right to make such changes and disclaims responsibility for any adverse impacts resulting from updates or feature modifications.

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8. Acknowledgement of Risk and No Recourse

By using the Platform, Users acknowledge and accept all risks associated with their activities on the Platform and understand that the Platform is not liable for any financial losses, damages, or legal consequences resulting from the risks described in this Risk Disclosure Statement or other unforeseen circumstances. Users waive any claim or recourse against the Platform in connection with their use of the Platform.