Risks

Staking HYPE with Furnace carries real risk. This page lists what can go wrong, what Furnace's design does about each risk, and what it can't do. Read it before you stake, and only stake what you can afford to lose.

#Smart-contract risk

FurnaceStaking, Distributor, FurnaceEngine and the FURNACE token are new code. A bug could lock or lose funds, including staked HYPE.

What limits it: the contracts are small and single-purpose, and none of them can be upgraded. Staked HYPE sits in one contract that only stake, unstake, claim and exit can touch. The source is verified on the explorer.

What remains: the contracts are not audited. Treat them as unaudited until an audit report is linked here and on the dashboard. A non-upgradeable contract also means a bug can't be patched in place. A fix means deploying new contracts and moving your stake yourself.

#Distribution risk

Distributions come only from what reaches the Distributor. The engine can earn little, earn nothing, or lose money on its inventory. Any of these reduces or eliminates distributions.

• Arbitrage depends on price gaps that other market participants compete to close.
• Liquidity positions can lose value as prices move (impermanent loss), and that loss is Furnace's, not stakers'.
• Gas is paid whether or not an operation is profitable.

What limits it: engine losses hit Furnace's own inventory, not staked HYPE. The worst case for a staker is a zero distribution, not a loss of principal through the engine.

What remains: a week's distribution can be zero, and several weeks in a row can be zero. Past distributions don't predict future ones.

#Chain risk

Elysium is a new Arbitrum Orbit chain that settles to HyperEVM.

• At launch it runs a single sequencer. If the sequencer stops, nobody can transact, including stake, withdraw or claim, until it resumes.
• Elysium depends on HyperEVM and on the Arbitrum Orbit software stack, and inherits their risks.
• Network parameters, including how sequencer fees are split, are set by Kinetiq and can change.

#Builder-economics risk

Kinetiq has announced that a share of Elysium sequencer fees goes to builders, but it hasn't published the formula. Furnace makes no assumption about receiving any of it. Distributions don't depend on it, and the dashboard shows any such inflow separately if one ever arrives.

#Admin risk

A multisig owner controls a limited set of functions: pausing new stakes, managing keeper and pool allowlists, and withdrawing engine inventory to the treasury.

What limits it: the owner can't move, freeze or redirect staked HYPE, can't pause withdrawing or claiming, can't change the 80/20 split, and can't upgrade anything. Every one of these limits is in the verified source.

What remains: a compromised owner could halt the engine, which would stop engine revenue and therefore distributions, or could pause new stakes. Existing stakers can still withdraw.

#Keeper risk

Keepers are off-chain processes run by Furnace. If they stop, the engine stops operating and revenue stops. A faulty keeper can make unprofitable trades with engine inventory.

What limits it: keepers can only call FurnaceEngine against allowlisted pools, and the engine sends realized HYPE only to the Distributor. Keepers can't touch staked HYPE.

#Market risk

You stake HYPE and are paid in HYPE. The value of both changes with the HYPE price. Furnace doesn't hedge it.

#Wallet and phishing risk

• Only use Furnace addresses shown on the dashboard's Contracts panel.
• Furnace never asks for your seed phrase, never DMs first, and never asks you to send HYPE to an address. You stake by calling stake().
• The app checks the chain ID before every transaction. Read what your wallet shows before you sign.

#Regulatory risk

Rules for tokens and for protocols that share revenue with stakers differ by jurisdiction and keep changing. Changes could limit access to Furnace in some places. You are responsible for following the laws that apply to you.

#Summary