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

# Risk Mitigations

HertzFlow is designed to minimize risk for both traders and liquidity providers through robust on-chain risk controls. That said, decentralized leveraged trading carries inherent risks. Only participate with funds you're comfortable risking, and monitor your positions closely during periods of high volatility.

## How We Protect You

| Risk Type                    | What Can Happen                                                                                                       | How HertzFlow Mitigates It                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| ---------------------------- | --------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| **Directional Exposure**     | LPs become exposed to price movements when there's a large open interest imbalance, especially during volatility.     | **Dynamic Borrow Rates:** Utilization ratios are monitored in real time, adjusting hourly borrow rates to discourage extreme OI skew. **OI Monitoring:** Continuous tracking of imbalance metrics to adjust parameters proactively.                                                                                                                                                                                                                                                 |
| **Liquidity Risk**           | You may be unable to open/close positions at desired size, or LPs may face withdrawal delays during high utilization. | **Dynamic Position Limits (DPL):** Restricts outsized positions during extreme conditions. **Auto-Rebalancing:** Enforces long-short collateral rebalance to prevent concentration risk.                                                                                                                                                                                                                                                                                            |
| **Keeper Risk**              | Losses from inactive, malicious, or underperforming keepers that handle execution, liquidations, and price updates.   | **Automated Liquidations:** Executed deterministically on-chain by protocol-defined conditions — no manual intervention. **Decentralized Keeper Network:** Multiple independent keeper nodes with collateralized stakes. **Slashing & Incentives:** Penalizes inactive or malicious keepers while rewarding timely execution. **Redundant Failover:** Backup nodes and automated failover ensure continuity during congestion or outages.                                           |
| **Oracle & Price Deviation** | Settlement prices may deviate from order prices due to latency or oracle feed misalignment.                           | **Multi-Oracle Validation:** Pricing relies primarily on **Pyth**, with automatic fallback to a CEX index aggregated from leading exchanges (Binance, OKX, Bybit) plus an internal keeper-driven index for redundancy. **Deviation Threshold:** Trades are rejected if submitted prices deviate beyond predefined thresholds. **Time Travel Execution:** During oracle or network outages, eligible delayed orders may execute retroactively at historically validated fair prices. |


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