# Risks Here's a comprehensive breakdown of the risks: ### Smart Contract Risk Firelight, like other DeFi protocols, utilize smart contracts and are therefore exposed to potential bugs, vulnerabilities, and exploits. *Risk mitigation: smart contracts have been audited with an audit from OpenZeppelin and a Immunefi competition. The frontend has also been audited by Coinspect.* ### De-pegging of stXRP The value of stXRP is intended to mirror that of FXRP. However, this peg is maintained by market forces through liquidity pools on decentralized exchanges. In times of high market volatility or if there is insufficient liquidity, the price of stXRP could trade at a discount/premium to FXRP. This "de-pegging" would mean that users looking to exit from their position by selling stXRP might receive less than the value of their underlying staked FXRP. *Risk mitigation: stXRP holders will always be able to convert stXRP to FXRP through the vault via the redemptions for the vault’s exchange rate.* ### Slashing Risks During the initial launch phase, there will be no slashing risks. We will update this section with relevant details, closer to the date upon which we release the feature-complete protocol. ### Oracle-Related Risks stXRP and FXRP rely on the Flare Time Series Oracle (FTSO) for pricing. Learn more about the FTSOv2 [here](https://dev.flare.network/ftso/overview). *Risk mitigation: Flare’s oracle network has been extensively audited. Find all their audits* [*here*](https://dev.flare.network/support/audits/) ### Unstaking Cooldown Period Firelight incorporates an unstaking cooldown period to manage liquidity and prevent abrupt, large-scale withdrawals. This means that burning stXRP to redeem the underlying FXRP is not instantaneous. *Risk mitigation: During the launch phase, the unstaking period will be max 2 days, allowing for faster redemptions from stXRP to FXRP.* --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.firelight.finance/security-and-risks/risks.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.