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

# Indicative risk matrix

The matrix consolidates the principal risks, their severity if they occur, an indicative likelihood, and the mitigations in place. It is indicative: severity and likelihood are judgments, not guarantees. Read it alongside the pages above rather than in place of them.

| Risk                               | What it is                                                                 | Severity    | Likelihood                        | Primary mitigations                                                                                                                                       |
| ---------------------------------- | -------------------------------------------------------------------------- | ----------- | --------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Borrower default                   | A borrower fails to repay principal or interest                            | High        | Expected over time                | Underwriting and scorecard; collateral coverage; first-loss capital; MLA recourse                                                                         |
| Default clustering                 | Multiple correlated borrowers default together, e.g. in a market shock     | Critical    | Elevated in stress                | Concentration and correlation limits set per pool by the delegate; diversification; first-loss sizing                                                     |
| Liquidity / redemption run         | Clustered withdrawals meet actively deployed capital                       | High        | Moderate; high in stress          | Disclosed withdrawal queue with position and estimated timing; liquidity-reserve pools where the delegate has elected to maintain one; staged fulfillment |
| First-loss inadequacy              | Losses exceed the delegate's first-loss layer                              | High        | Situational                       | First-loss sizing disclosed per pool; senior lenders informed of the cushion they hold                                                                    |
| Collateral valuation / liquidation | Collateral is mispriced or cannot be liquidated at model value             | High        | Market-dependent                  | Chainlink price feeds for coverage monitoring; per-default liquidation limit                                                                              |
| Concentration                      | Over-exposure to one borrower, sector, or strategy                         | High        | Controllable                      | Portfolio controls and limits set per pool by the delegate; disclosure of book composition                                                                |
| Smart-contract failure             | A bug or exploit affects pool, loan, or token contracts                    | Critical    | Low if audited, unknown otherwise | Module separation; least-privilege, multisig-and-timelock-gated access control; audit and bug bounty status                                               |
| Cross-chain / bridge               | The supply invariant fails or bridged assets are compromised               | High        | Unverifiable until published      | Burn-and-mint mechanism moving 1M QFI from TRON to BSC; verified contract addresses                                                                       |
| Custody / settlement               | Loss or failure at a custody or settlement partner                         | High        | Partner-dependent                 | SafeHeron                                                                                                                                                 |
| Regulatory / securities            | The token or the pooled product is characterized as a regulated instrument | Critical    | Material                          | KYC/permissioning; jurisdictional exclusions; marketing discipline; legal opinions                                                                        |
| Treasury reflexivity               | Operations depend on selling QFI into weakness                             | High        | Bear-market                       | Stablecoin operating reserve policy confirmed; disclosed runway figures                                                                                   |
| Delegate / key-person              | A delegate underperforms, acts in conflict, or departs                     | Medium–High | Situational                       | First-loss alignment; fee and conflicts disclosure; delegates admitted and vetted by the protocol's administrators                                        |
| Legal recovery                     | Cross-border enforcement is slow, costly, or partial                       | Medium–High | On default                        | MLA, cross-default, collateral; Panama                                                                                                                    |
| Token-market                       | QFI is volatile and has no cash-flow claim today                           | High        | Ongoing                           | Fixed supply; verifiable burn; honest disclosure that QFI is not a claim on yield                                                                         |