Risk Disclosure

Trading digital assets, tokenized real-world assets, and derivative contracts involves substantial risk and is not suitable for every person. The value of any asset traded through Lume can fluctuate rapidly and substantially. You should be prepared to lose all of the funds you commit to the Service. You should never trade with funds you cannot afford to lose, and you should never use leverage you do not fully understand.

Past performance — including the performance of the S&P 500 over the last hundred years, the appreciation of any individual stock, or the historical returns of any digital asset — is not a reliable indicator of future results.

Issuer and counterparty risk

An xStock is a token issued by Backed Finance AG (and its affiliates) that tracks the price of an underlying U.S. equity. The token is collateralized by the underlying security held in custody by a regulated Swiss custodian. If Backed, its custodian, its bank counterparties, or any other party in the issuance chain becomes insolvent, suffers an operational failure, is subject to regulatory action, or is unable or unwilling to perform, the value of the token could be impaired or lost in whole or in part.

Redemption risk

The ability to redeem an xStock for the underlying security or its cash equivalent is governed by the issuer’s terms, may require KYC and accreditation, may be limited to certain jurisdictions, and may be paused or terminated by the issuer. Lume cannot guarantee that redemption will be available to you at any particular time.

No shareholder rights

Holding an xStock does not make you a shareholder of the underlying company. You do not have voting rights, proxy rights, or rights to attend shareholder meetings. Dividends, if and when handled, are passed through under the issuer’s mechanism (which may differ from a record-holder dividend, and may have different tax treatment). Corporate actions such as splits, mergers, and spin-offs are handled under the issuer’s own corporate-actions policy.

Tracking error and pricing risk

The on-chain price of a token may diverge — sometimes significantly — from the price of the underlying security on its primary exchange. Divergence can arise from low liquidity, market-maker spreads, oracle delays, network congestion, exchange outages, after-hours pricing, and during periods of market stress. There is no guarantee that the token price will revert to the underlying.

Off-hours and weekend trading

Tokenized equities can be traded on-chain when traditional U.S. markets are closed (overnight, on weekends, and during holidays). Prices during these periods are determined by on-chain liquidity and may gap significantly when traditional markets reopen.

RWA tokens (Ondo and others)

Other tokenized real-world-asset products — such as tokenized U.S. Treasury bills issued by Ondo Finance — carry their own issuer-specific risks, redemption rules, eligibility requirements, and yield mechanics. Read the issuer’s documentation before transacting.

Third-party venue (Hyperliquid)

Perpetual futures offered through the Service are executed on Hyperliquid, an independent third-party on-chain perpetuals protocol. Lume is not the counterparty to your perpetual trades, does not operate the Hyperliquid order book, and does not control its matching engine, oracle, funding-rate calculation, liquidation engine, fees, or uptime. You are subject to Hyperliquid's protocol rules and risks in addition to those described here. Outages, bugs, exploits, governance changes, or regulatory action affecting Hyperliquid may prevent you from opening, modifying, or closing positions, and may result in loss of collateral.

Leverage amplifies losses

Perpetual futures allow you to take a position larger than your collateral. A small adverse move in the underlying market can result in losses larger than your initial collateral, and at high leverage your entire collateral can be wiped out within minutes or seconds. The maximum advertised leverage on the Service (currently up to 50× on certain markets) does not imply that such leverage is appropriate for any particular user.

Liquidation

If your margin falls below the maintenance requirement, your position may be liquidated automatically by the Protocol, often at an unfavorable price. Liquidation may occur with little or no warning during volatile market conditions and is irreversible.

Funding rates

Perpetual contracts use a periodic funding-rate mechanism to keep the contract price near the underlying. Funding can be positive or negative and is paid between long and short holders. Holding a position over time can result in significant cumulative funding cost.

Oracle, gap, and chain risk

The mark price used by the Protocol is determined by an oracle. If the oracle is delayed, manipulated, or fails, mark prices and liquidations may be incorrect. During market gaps or chain congestion, you may be unable to add margin, reduce risk, or close a position.

All transactions through the Service are executed by smart contracts deployed on Solana. Smart contracts may contain bugs, design flaws, or unforeseen interactions that result in the partial or total loss of funds, even when the contracts have been audited. Audits reduce, but do not eliminate, this risk. Lume does not author or control the smart contracts of third-party Protocols and is not liable for their behavior.

Lume is non-custodial. You are solely responsible for safeguarding your authentication credentials, recovery method, and any private keys exported to you. If you lose access to your wallet, neither Lume nor any third party can recover your funds. If your credentials are compromised, an attacker may drain your wallet immediately and irreversibly.

The Solana network can experience congestion, halts, forks, restarts, validator outages, and software upgrades that affect the availability or finality of transactions. During such events you may be unable to trade, deposit, withdraw, or close positions. Maximal-extractable-value (MEV) activity, sandwiching, and front-running by other participants may negatively affect execution quality.

Bridges and cross-chain transfers carry additional risk, including bridge exploits and lockups. Use bridges only to the extent necessary, and verify the legitimacy of any bridge before using it.

Trading on the Service is generally collateralized in USDC or other stablecoins. Stablecoins carry their own risks, including issuer insolvency, reserve mismanagement, redemption suspensions, regulatory action against the issuer, and market-wide depeg events that can cause the stablecoin to trade significantly below US$1.00.

Fiat on-ramp and off-ramp providers (currently MoonPay, when enabled) are independent businesses subject to their own risks, including downtime, geographic restrictions, KYC delays, and chargeback policies. We do not control on-ramp pricing, spreads, or limits.

If you fund or withdraw using a local currency that is not U.S. dollars, you are exposed to the exchange rate between your local currency, the U.S. dollar, and the relevant stablecoin. Exchange rates can move significantly and quickly, and may include spreads charged by your bank, your card issuer, or your on-ramp provider. Capital controls and currency-conversion restrictions in your jurisdiction may apply.

The legal status of tokenized securities, RWAs, perpetual futures, and digital-asset trading interfaces is evolving worldwide and is unsettled in many jurisdictions. Future regulation, enforcement, or guidance could (i) restrict or prohibit your ability to access the Service, (ii) require new disclosures, KYC, or eligibility checks, (iii) impose tax, registration, or licensing obligations on you or on Protocols, (iv) result in the suspension or delisting of certain assets or markets, or (v) materially affect the value of tokens you hold. You are responsible for monitoring and complying with the laws of your own jurisdiction.

Tax treatment of tokenized assets, derivatives, and digital-asset transactions varies by jurisdiction and is your sole responsibility. Lume does not provide tax advice and does not generate authoritative tax statements. You should consult a qualified tax professional in your jurisdiction.

Funds and assets used through the Service are not protected by the U.S. Securities Investor Protection Corporation (SIPC), are not insured by the U.S. Federal Deposit Insurance Corporation (FDIC), and are not covered by any equivalent investor-compensation or deposit-insurance scheme. There is no central guarantor in the event of issuer or Protocol failure.

Nothing on the Service — including market data, charts, screeners, watchlists, suggested searches, ticker placement, default leverage settings, and educational content — constitutes a recommendation by Lume to enter into any transaction. You are solely responsible for evaluating the merits and risks of any transaction in light of your own financial circumstances, investment objectives, and risk tolerance, and you should consult independent advisers as appropriate.

The Service may be unavailable from time to time due to maintenance, deployments, infrastructure outages, or denial-of-service attacks. Phishing, fake websites, malicious browser extensions, social-engineering attacks, and SIM-swap attacks targeting digital-asset users are common. Always verify the URL of the Service (lumefi.app and app.lumefi.app), enable strong account security, and never share recovery information with any party — including anyone claiming to represent Lume.

By using the Service, you acknowledge that you have read, understood, and accept the risks described in this Risk Disclosure, that you have considered your financial situation and capacity to bear loss, and that you are solely responsible for your trading decisions and their consequences. This Risk Disclosure is not exhaustive — other risks not described here may apply, and the risks described here may evolve.