The risk involved in taking or issuing a bet
Logium allows you to trade from either the perspective of an issuer who creates bets or a taker who takes already available bets. Both sides are exposed to different types of risks.
Using any decentralized platform comes with the possibility of smart contract bugs. Nevertheless, using our platform, you can limit the value of assets you expose to risk.
Whether you are an issuer or a taker, you access the platform by connecting your wallet app. In the current version of Logium, the only supported wallet is Metamask.
Keeping your tokens in a private wallet means you control them fully. It is only up to you to keep them safe. This solution is much better than standard centralized exchanges because, as you probably already know: not your keys, not your coins.
An issuer is a person who creates new bets for other users to take. To do so, it is necessary to deposit collateral. It backs the bet with real funds. You can only lose as much as you deposited on each bet. There is no negative balance on Logium, as it is with other leveraged platforms. You cannot lose more money than you put in. Additionally, issuing bets is entirely free. There is not even a gas fee. The platform's commission is taken at the time of settlement and is only paid by the winning side.
From the issuer's perspective, risk takes the form of a potential attack on the smart contract where their collateral is deposited. However, this risk has been kept to a minimum by the developers and our code has successfully gone through a third-party security audit.
The bet taker is the other party to a transaction on the Logium platform. They do not need to deposit any collateral. They just need to have USDC available in their wallet to begin taking bets.
The risk for the taker is when the bet is placed, and the funds are transferred to the smart contract, where hypothetically, they could be stolen by hackers. However, as mentioned before, we made sure to reduce this risk to a minimum.
Another source of risk are auto-exercise bots. For a bet to be resolved in the taker's favor, an "exercise" transaction needs to be executed at a specific point in time. We maintain a cluster of auto-exercise bots which monitor the network and exercise bets when needed. However, in the event of a total outage where all auto-exercise bots are down, bets would always be resolved in favor of the issuer. Similarly, in a situation where the exercise gas fee is greater than the bet's value, auto-exercise bots do not send a transaction and the bet is won by the issuer. It is important to mention that a bet can be exercised by anyone and if we stopped maintaining auto-exercise bots, users could exercise their bets themselves by directly calling our smart contracts.
Our product also complies with relevant legislation, and if legislative rules change, we are prepared to adapt it to new regulations.
In summary, we are aware of risks associated with using the Logium platform and we want our users to keep them in mind when they engage with the product.
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