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