Collateral Agreement

1General Provisions and Definitions

These Collateral Terms are issued by CRYPTO FUND LLC, a limited liability company organized under the laws of the State of Delaware, United States of America ("we," "us," or the "Company"). They govern your use of those features of New One that let you view, construct, sign, and broadcast transactions involving collateralized positions on third-party lending and borrowing protocols deployed to public blockchains.

These Collateral Terms supplement, and do not replace, the User Agreement governing New One generally. Where a provision of these Collateral Terms conflicts with the User Agreement in respect of collateral activity, these Collateral Terms control for that activity only.

Collateral

Digital Assets that you transfer or lock into a Protocol's Smart Contract to secure an obligation owed to that Protocol or to its participants. Collateral is never transferred to us and is never held by us.

Collateralized Position

The combined state, recorded on a Blockchain by a Protocol, of Collateral you have posted and any obligation outstanding against it, together with the parameters that Protocol applies to that state.

Collateralization Ratio

The ratio of the value of posted Collateral to the value of the obligation it secures, expressed as a percentage. Its inverse is commonly expressed as a loan-to-value ratio.

Loan-to-Value Ratio (LTV)

The ratio of the value of an outstanding obligation to the value of the Collateral securing it. A Protocol typically defines a maximum LTV at which new borrowing is permitted and a higher liquidation threshold at which Collateral becomes eligible for seizure.

Liquidation

The process by which a Protocol permits some or all of your Collateral to be seized and sold, usually at a discount to a third-party liquidator, when your position breaches that Protocol's liquidation threshold. Liquidation is executed by Smart Contract code and by independent third parties, not by us.

Liquidation Penalty

The discount, bonus, or fee that a Protocol awards to a liquidator or retains for its own reserve when Collateral is liquidated. It is a real and immediate loss borne by the position holder.

Price Oracle

A mechanism by which a Protocol imports off-chain or cross-market price data on-chain in order to value Collateral and obligations. Oracles are operated by third parties and are not controlled by us.

Protocol

A set of Smart Contracts, deployed by a party other than us, that accepts Collateral and administers borrowing, interest accrual, and Liquidation according to rules encoded in that contract.

Non-Custodial

A model in which the software provider does not hold, control, or have any technical ability to access a user's private keys, recovery phrase, or Digital Assets at any time. New One is Non-Custodial without exception.

Gas Fee

A fee payable to Blockchain network validators to process a transaction. Gas Fees are set by network conditions, are paid to third parties, and are neither received nor retained by us.

Smart Contract

Self-executing code deployed to a Blockchain that performs defined operations when specified conditions are satisfied, without discretion and without human intervention.

Supported Networks

The Blockchains with which New One currently interoperates, being Bitcoin, Ethereum, Solana, Base, Polygon, Avalanche, BNB Chain, and Arbitrum. We may add or remove networks at our discretion.

Rules of Interpretation

• Headings are for convenience only and do not affect interpretation.
• The singular includes the plural and vice versa.
• "Including" and "such as" are illustrative and do not limit the words preceding them.
• References to a statute include any amendment or re-enactment of it in force from time to time.

2Scope of What We Provide — and What We Do Not

New One is a Non-Custodial multi-chain self-custody wallet. In relation to collateral activity, we provide software: an interface that reads publicly available on-chain data, presents it to you, helps you assemble a transaction, and lets you sign that transaction with a private key that never leaves your device.

Every element of a Collateralized Position exists on a Blockchain, between you and a Protocol you have chosen. We are not a party to it. To state the position without ambiguity:

• We never take possession, custody, or control of your Collateral. Collateral moves directly from your Wallet address to a Protocol's Smart Contract address.
• We do not hold, claim, or acquire a security interest in your Collateral, and we are not a secured party, pledgee, trustee, or bailee in respect of it.
• We do not rehypothecate, lend, stake, re-pledge, or otherwise use your Collateral. We could not do so, because we do not hold it.
• We are not the lender, borrower, counterparty, guarantor, market maker, or clearing agent in any transaction you enter into through the Services.
• We do not set Collateralization Ratios, interest rates, liquidation thresholds, or Liquidation Penalties. Those parameters are defined by each Protocol's own code and governance.
• We do not operate Price Oracles, execute Liquidations, or participate in Liquidation auctions.
• We do not provide investment, financial, legal, tax, or accounting advice. Nothing displayed in the Services is a recommendation to post Collateral, to borrow, or to interact with any Protocol.
• We cannot reverse, cancel, freeze, pause, or modify any on-chain transaction once it has been broadcast, including a Liquidation. Blockchain transactions are final by design.

Where the Services display an interest rate, health factor, LTV, projected liquidation price, or similar figure, that figure is derived from public data and third-party sources, is furnished for convenience only, may be stale or incorrect, and is not a representation, guarantee, or commitment by us. The authoritative state of your position is the state recorded on-chain by the relevant Protocol.

3Eligibility and Compliance

You may use the collateral features of New One only if you are at least 18 years old, have full legal capacity to enter a binding contract, and are not prohibited from doing so under the law applicable to you.

• You represent that all Digital Assets you post as Collateral are lawfully owned or controlled by you and derive from lawful sources.
• You represent that you are not listed on, and are not owned or controlled by a person listed on, any sanctions list administered by the U.S. Department of the Treasury's Office of Foreign Assets Control or any equivalent authority.
• You represent that you are not located in, ordinarily resident in, or organized under the laws of a jurisdiction subject to comprehensive U.S. sanctions.
• You are responsible for determining whether posting Collateral or borrowing against it is lawful where you are, and for any licensing, registration, disclosure, or reporting obligation that applies to you.

We may restrict access to particular features from particular jurisdictions where we consider it necessary to comply with a legal obligation. Because the Services are Non-Custodial, any such restriction affects the interface only: your Digital Assets and your existing on-chain positions remain yours and remain accessible through your recovery phrase in any compatible wallet application.

4Position Parameters Are Set by Protocols

Every economic term of a Collateralized Position — which assets are accepted as Collateral, the maximum LTV at which you may borrow, the liquidation threshold, the interest rate and how it accrues, any origination or protocol fee, and the size of the Liquidation Penalty — is defined by the Protocol you interact with. These parameters are encoded in Smart Contracts and may be changed by that Protocol's governance process, in some cases with little or no notice and in some cases with retroactive effect on positions already open.

• Interest on a borrowed amount typically accrues continuously or per block, not on a payment schedule you control. Accrual increases your LTV over time even if you take no action and even if Collateral prices do not move.
• Many Protocols apply variable rates that respond to utilization. A rate that was tolerable when you opened a position may rise sharply within hours.
• A Protocol may change the risk parameters applied to a given Collateral asset, reduce its maximum LTV, freeze new borrowing against it, or delist it entirely. Any of these can push an existing position toward Liquidation.
• Some Protocols apply per-asset supply or borrow caps, isolation modes, or debt ceilings that limit what you can do with a position after you have opened it.

You are responsible for reading and understanding the documentation, audits, governance history, and Smart Contract code of any Protocol before you interact with it. We do not vet, endorse, audit, insure, or continuously monitor Protocols, and the presence of a Protocol in the interface is not a representation that it is safe, solvent, correctly implemented, or suitable for you.

5Liquidation

When a Collateralized Position breaches the liquidation threshold defined by its Protocol, the Protocol's Smart Contracts permit any third party to repay some or all of your obligation and seize a corresponding amount of your Collateral, typically together with a Liquidation Penalty. This occurs automatically, without notice, without your confirmation, and without any involvement by us.

• Liquidation is triggered by the Protocol's own valuation of your position, using its own Price Oracle. It is not triggered by us and cannot be stopped by us.
• Depending on the Protocol, Liquidation may be partial — restoring the position to a permitted ratio — or full, closing the position entirely. You do not choose which.
• Collateral seized in Liquidation is generally transferred at a discount to the liquidator. That discount is a loss you bear. Liquidation is not the same as selling at the market price.
• Liquidation is irreversible once the transaction is confirmed. There is no cancellation window, no appeal, and no mechanism by which we could restore the position.
• Competing liquidators may execute against your position within the same block in which it becomes eligible. There is frequently no practical interval in which to react.

You are solely responsible for monitoring your positions and for maintaining a margin of safety appropriate to the volatility of your Collateral. You should not rely on any figure, alert, or indicator displayed by the Services as a substitute for that responsibility.

6Fees, Gas, and Costs

We do not charge a fee for viewing, opening, maintaining, or closing a Collateralized Position. Where we introduce a fee for an optional feature, it will be disclosed to you in the interface before you confirm the relevant transaction.

• You will always pay a Gas Fee to the relevant network. Gas Fees are set by network conditions, are paid to validators rather than to us, and are not refundable — including where a transaction reverts, fails, or is not confirmed.
• Protocols may charge origination fees, protocol fees, reserve factors, flash-loan fees, or Liquidation Penalties. These are charged by the Protocol, denominated in Digital Assets, and are outside our control.
• Where a transaction routes through an aggregator, bridge, or swap venue, that third party may apply a spread or routing fee and your execution may differ from any quoted figure.
• You are solely responsible for determining what taxes apply to your collateral activity and for reporting and remitting them. Posting Collateral, borrowing, repaying, and being liquidated may each be a taxable event in your jurisdiction. We do not withhold taxes and do not file returns on your behalf.

7Smart Contract Interaction and Token Approvals

Interacting with a Protocol generally requires you to grant that Protocol's Smart Contract an approval or allowance permitting it to move a specified token from your address. On some networks the conventional pattern is an unlimited allowance, which persists indefinitely until you revoke it.

• An approval is a standing authorization. If the approved contract is later exploited, upgraded maliciously, or was never what it appeared to be, that authorization may be used to move your assets without any further action by you.
• You should review the approvals granted from your addresses periodically and revoke any you no longer need. Revocation is itself an on-chain transaction and costs a Gas Fee.
• Verify the contract address you are approving against the Protocol's own published documentation. Address substitution and lookalike contracts are a common attack.
• Once you sign, the transaction is yours. We cannot recall, amend, or block it, and we bear no responsibility for a signature you gave — including one given in error, under time pressure, or as a result of deception.

Your private keys and recovery phrase are generated on your device, stored in your device's secure hardware, and never transmitted to us. We cannot sign on your behalf, cannot recover a lost recovery phrase, and cannot access your positions.

8Alerts, Indicators, and Position Data

The Services may display health indicators, ratio warnings, or optional notifications intended to help you observe a deteriorating position. These are provided on a best-effort, informational basis only.

• Alerts depend on network connectivity, push-notification infrastructure operated by third parties, device settings, background-refresh permissions, and the availability of data sources. Any of these may fail.
• An alert may be delayed past the point at which action is still possible, may arrive after Liquidation has already occurred, or may not arrive at all.
• Displayed prices, ratios, and liquidation estimates are approximations derived from third-party data. A Protocol's own Price Oracle may value your position differently, and its valuation is the one that governs.
• We give no undertaking to provide alerts, to continue providing them, or to provide them within any particular time.

THE ABSENCE OF AN ALERT IS NOT AN INDICATION THAT YOUR POSITION IS SAFE. YOU REMAIN SOLELY RESPONSIBLE FOR MONITORING YOUR POSITIONS AT ALL TIMES.

9Disclaimer of Warranties and Limitation of Liability

THE SERVICES ARE PROVIDED "AS IS" AND "AS AVAILABLE," WITHOUT WARRANTY OF ANY KIND. TO THE MAXIMUM EXTENT PERMITTED BY LAW, WE DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, AND NON-INFRINGEMENT, AND ANY WARRANTY THAT THE SERVICES OR ANY DATA THEY DISPLAY WILL BE UNINTERRUPTED, TIMELY, SECURE, ACCURATE, OR ERROR-FREE.

WE MAKE NO WARRANTY OR REPRESENTATION WHATSOEVER CONCERNING ANY PROTOCOL, SMART CONTRACT, PRICE ORACLE, BRIDGE, OR OTHER THIRD-PARTY SYSTEM WITH WHICH YOU CHOOSE TO INTERACT, INCLUDING AS TO ITS SECURITY, SOLVENCY, CORRECTNESS, PARAMETERS, OR CONTINUED OPERATION.

TO THE MAXIMUM EXTENT PERMITTED BY LAW, WE WILL NOT BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES, OR FOR ANY LOSS OF PROFITS, REVENUE, DATA, GOODWILL, OR DIGITAL ASSETS, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE, EVEN IF WE HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

TO THE MAXIMUM EXTENT PERMITTED BY LAW, OUR TOTAL AGGREGATE LIABILITY ARISING OUT OF OR RELATING TO THESE COLLATERAL TERMS OR YOUR COLLATERAL ACTIVITY WILL NOT EXCEED THE GREATER OF (A) THE TOTAL FEES YOU PAID TO US IN THE TWELVE MONTHS PRECEDING THE EVENT GIVING RISE TO THE CLAIM, OR (B) ONE HUNDRED U.S. DOLLARS (US$100).

Without limiting the foregoing, we are not liable for any loss arising from: Liquidation of a position, however caused; the accuracy, latency, failure, or manipulation of a Price Oracle; a change to a Protocol's parameters; a defect, exploit, or economic failure in a Smart Contract we did not author; network congestion, outage, reorganization, or fork preventing you from adding Collateral or repaying; a transaction you signed; the loss or disclosure of your recovery phrase; or the conduct, insolvency, or failure of any third party.

Nothing in these Collateral Terms excludes or limits liability for fraud, fraudulent misrepresentation, willful misconduct, or any liability that cannot lawfully be excluded. Some jurisdictions do not permit certain exclusions or limitations; in those jurisdictions the provisions above apply only to the extent permitted.

10Indemnification

You agree to indemnify, defend, and hold harmless CRYPTO FUND LLC and its members, managers, officers, employees, contractors, and agents from and against any claim, demand, action, loss, liability, damage, cost, or expense (including reasonable attorneys' fees) arising out of or relating to:

• Your collateral activity, including any transaction you sign and any position you open, maintain, or allow to be liquidated.
• Your breach of these Collateral Terms, the User Agreement, or any applicable law or regulation.
• Any dispute between you and a Protocol, a liquidator, a counterparty, or any other third party.
• Any tax, reporting, or licensing obligation of yours that you failed to satisfy.

We may assume the exclusive defense and control of any matter subject to indemnification by you, in which case you agree to cooperate with us.

11Governing Law

These Collateral Terms and any dispute arising out of or relating to them or to your collateral activity are governed by the laws of the State of Delaware and, where applicable, the federal laws of the United States, without regard to conflict-of-laws principles. The United Nations Convention on Contracts for the International Sale of Goods does not apply.

The Federal Arbitration Act governs the interpretation and enforcement of Section 12.

12Dispute Resolution, Arbitration, and Class-Action Waiver

PLEASE READ THIS SECTION CAREFULLY. IT AFFECTS YOUR LEGAL RIGHTS, INCLUDING YOUR RIGHT TO FILE A LAWSUIT IN COURT AND TO HAVE A JURY TRIAL.

Informal Resolution First

Before commencing arbitration, you agree to notify us in writing at support@newone.io, describing the dispute and the relief sought. We will attempt in good faith to resolve the matter with you for sixty (60) days from receipt. Either party may commence arbitration only after that period has elapsed.

Binding Arbitration

Any dispute not resolved informally will be settled by final and binding arbitration administered by the American Arbitration Association under its Consumer Arbitration Rules, before a single arbitrator. The seat of arbitration is Wilmington, Delaware, and the language is English. The arbitrator has exclusive authority to resolve any dispute regarding the interpretation, applicability, or enforceability of this Section. Judgment on the award may be entered in any court of competent jurisdiction.

Your Right to Opt Out

You may opt out of this arbitration agreement by sending written notice to support@newone.io within thirty (30) days of first accepting these Collateral Terms, stating your name and your intention to opt out. Opting out does not affect any other provision, and we will not retaliate against you for doing so.

Exceptions

• Either party may bring an individual claim in small claims court if the claim qualifies and remains in that court.
• Either party may seek injunctive or other equitable relief in a court of competent jurisdiction to prevent actual or threatened infringement or misappropriation of intellectual property rights.

Class-Action Waiver

ALL CLAIMS MUST BE BROUGHT IN AN INDIVIDUAL CAPACITY AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS, COLLECTIVE, CONSOLIDATED, OR REPRESENTATIVE PROCEEDING. THE ARBITRATOR MAY NOT CONSOLIDATE MORE THAN ONE PERSON'S CLAIMS OR PRESIDE OVER ANY FORM OF REPRESENTATIVE PROCEEDING. If this waiver is held unenforceable as to a particular claim, that claim must proceed in court and is severed from any arbitration.

Time Limit

Any claim arising out of or relating to these Collateral Terms must be filed within one (1) year after it arose, or it is permanently barred, except where a longer period is required by applicable law.

13Force Majeure

We are not liable for any failure or delay in providing the Services caused by circumstances beyond our reasonable control, including natural disaster, war, civil unrest, epidemic, labor action, governmental or regulatory action, power or telecommunications failure, app store removal, failure of a node or data provider, cyberattack, and any halt, fork, reorganization, congestion, or consensus failure of a Blockchain network.

Because the Services are Non-Custodial, an interruption of the Services does not affect your ownership of your Digital Assets or the existence of your on-chain positions. Your recovery phrase restores your Wallet in any compatible application, and your positions continue to be administered by their Protocols — including their Liquidation logic — whether or not our interface is available.

14Amendment, Suspension, and Termination

We may amend these Collateral Terms from time to time. The current version is always published at this address with the date it took effect. Where a change materially reduces your rights or increases your obligations, we will give notice through the App, the Site, or another reasonable means before it takes effect. Continued use after the effective date constitutes acceptance.

We may modify, suspend, or discontinue any collateral feature at any time, including to address a security threat, comply with a legal obligation, or retire functionality. You may stop using the collateral features at any time; doing so does not close, repay, or unwind any position you have already opened on a Protocol, which remains subject to that Protocol's rules until you settle it on-chain.

Sections concerning disclaimers, limitation of liability, indemnification, governing law, and dispute resolution survive any termination.

15Miscellaneous

Severability and Waiver

If any provision is held invalid or unenforceable, it will be modified to the minimum extent necessary to make it enforceable, and the remaining provisions continue in full force. Our failure to enforce a provision is not a waiver of our right to enforce it later.

Entire Agreement

These Collateral Terms, together with the User Agreement, constitute the entire agreement between you and CRYPTO FUND LLC in respect of collateral activity and supersede all prior understandings on that subject.

Assignment

You may not assign these Collateral Terms or any rights under them without our prior written consent. We may assign them to an affiliate or in connection with a merger, acquisition, reorganization, or sale of assets.

Intellectual Property

The interface, its software, and its design elements are owned by CRYPTO FUND LLC or its licensors. Nothing in these Collateral Terms grants you any right in a Protocol's code, branding, or documentation, which belong to their respective owners.

Electronic Communications and Notices

You consent to receive communications from us electronically. Notices to us should be sent to support@newone.io; notices to you may be given through the App, the Site, or any contact address you have supplied.

Language

These Collateral Terms are drafted in English. If we publish a translation and an inconsistency arises, the English version prevails to the extent permitted by applicable law.

1Overview and Relationship to the Privacy Statement

This Part describes how CRYPTO FUND LLC handles information in connection with the collateral features of New One. It supplements the Privacy Statement published with our User Agreement, which continues to apply in full; this Part addresses only what is specific to collateral activity.

The governing fact is unchanged: New One is Non-Custodial. We do not collect, receive, transmit, or store your private keys, recovery phrase, wallet password, or device passcode, and we hold no ability to move, freeze, or inspect your Collateral beyond what any member of the public can read from a Blockchain.

2Information We Collect

Public on-chain information

• Wallet addresses you use in the App, and the Protocol interactions, Collateral deposits, borrowings, repayments, and Liquidations recorded against them.
• Transaction hashes, amounts, timestamps, and contract addresses, all of which are published by the network itself rather than by us.

Information collected automatically

• Device and application data: device model, operating system version, App version, language, and time zone.
• Log and diagnostic data: crash reports, error traces, performance metrics, and feature interaction events.
• Network data: IP address, from which approximate city- or country-level location may be inferred.
• Notification tokens, where you enable position alerts.

Information you provide

Contact details and correspondence when you email support about a position, submit feedback, or report a defect.

What we never collect

Private keys. Recovery phrases. Wallet passwords. Device passcodes or biometric data. We also do not require government identification, proof of address, or banking information to use the collateral features.

3How We Use Information

• To display your positions, balances, and history, and to assemble transactions for you to sign.
• To generate the health indicators and optional alerts described in Part I, Section 8.
• To diagnose faults, monitor performance, and improve the reliability of the interface.
• To detect, investigate, and prevent fraud, abuse, and security incidents.
• To respond to support requests and to communicate with you about the Services.
• To comply with legal obligations and to establish, exercise, or defend legal claims.

We do not use collateral activity data to make automated decisions producing legal or similarly significant effects concerning you, and we do not use it for cross-context behavioral advertising.

4Sharing and Disclosure

We do not sell personal information and we do not share it for cross-context behavioral advertising, as those terms are defined under California law. We disclose information only as follows:

• To service providers who process it on our behalf under contractual confidentiality and security obligations, such as hosting, analytics, node, and error-reporting vendors.
• To data providers whose public-data endpoints we query in order to render your positions. A query to such a provider may reveal the address being queried.
• To law enforcement, regulators, or other authorities where required by law or where we believe in good faith that disclosure is necessary to comply with a legal obligation or protect rights, safety, or property.
• To a counterparty in connection with a merger, acquisition, financing, or sale of assets, subject to this Part continuing to apply.
• To anyone else, with your consent or at your direction.

Separately, and unavoidably, your on-chain activity is disclosed to the world by the Blockchain. Anyone can associate a position with an address and, with sufficient effort, attempt to associate that address with a person. Consider this before posting Collateral.

5Security, Retention, and On-Chain Permanence

We maintain administrative, technical, and physical safeguards designed to protect information we hold, including encryption in transit and at rest, least-privilege access controls, and audit logging. No system is perfectly secure and we cannot guarantee absolute security.

We retain information only for as long as necessary for the purposes described in this Part, or longer where required by law. Diagnostic and log data is typically retained for a period measured in months rather than years.

On-chain records are permanent. Neither we nor you can amend or erase a Blockchain transaction, including a Liquidation. Any request to delete information we hold cannot extend to data recorded on a public network, because we do not control it.

6Your Rights and Choices

Subject to the law applicable to you — including the California Consumer Privacy Act as amended by the California Privacy Rights Act, and the comprehensive privacy statutes of Virginia, Colorado, Connecticut, Utah, Texas, Oregon, Montana, and other states — you may have the right to:

• Know what information we hold about you and how we use and disclose it.
• Access a copy of that information, in a portable format where required.
• Correct information that is inaccurate.
• Delete information we hold about you, subject to the on-chain limitation described above.
• Opt out of the sale or sharing of personal information — noting that we engage in neither.
• Limit the use of sensitive personal information.
• Appeal a denied request, where your state provides that right.
• Not be discriminated against for exercising any of these rights.

You may also disable position alerts at any time in the App or in your device settings, and you may revoke token approvals directly from your Wallet without any involvement by us. To exercise a privacy right, contact privacy@newone.xyz. We will verify your request by reasonable means before acting on it, and you may use an authorized agent where the law permits.

7Third-Party Services

Protocols, Price Oracles, bridges, aggregators, block explorers, and node providers you reach through the Services are operated independently and maintain their own privacy practices. We are not responsible for how they collect or use information, and you should review their notices before relying on them.

8Protection of Minors

The collateral features are not directed to, and may not be used by, anyone under 18. We do not knowingly collect information from children. If we learn that we have collected information from a person under 18, we will delete it promptly. A parent or guardian who believes we may hold such information should contact privacy@newone.xyz.

9Changes to This Part

We may update this Part to reflect changes in our practices or in the law. The effective date shown on this page always identifies the current version, and we will give prominent notice before a material change takes effect. Continued use after that date indicates acceptance.

10Contact Us

For privacy questions, requests, or complaints relating to collateral activity, contact privacy@newone.xyz. For general support, contact support@newone.io. We aim to acknowledge privacy requests within ten (10) business days and to respond substantively within the period required by the law applicable to you.

1Purpose and Scope

This Statement describes the principal risks of posting Collateral and borrowing against it through Protocols you reach using New One. It is not exhaustive, and no document could be. It is intended to ensure that you enter into collateral activity with an accurate understanding of what can go wrong.

Collateralized borrowing is a leveraged activity. It can result in the total loss of the Collateral you post, in addition to the obligation you have taken on. You should not post Collateral you cannot afford to lose entirely, and you should not use these features unless you have independently satisfied yourself that you understand each risk described below.

Nothing in this Statement is advice, and nothing in it creates an obligation on our part to protect you from any risk it describes. We provide software. We hold nothing, guarantee nothing, and can intervene in nothing.

2Market and Price Risk

Digital Asset prices are highly volatile. Moves of tens of percent within a single day are ordinary in this market, and moves considerably larger have occurred repeatedly within single hours.

• A decline in the value of your Collateral raises your LTV without any action by you and moves your position toward Liquidation.
• An increase in the value of a borrowed asset has the same effect. If you borrow an asset that appreciates against your Collateral, your position deteriorates even if your Collateral holds its value.
• Correlated drawdowns are common: in a market-wide decline, the assets most likely to be used as Collateral often fall together, so diversification across Collateral assets may provide far less protection than expected.
• Past performance is not indicative of future results, and prices may fall to zero and remain there.

3Collateralization and Margin Ratio Risk

Protocols require positions to be over-collateralized, and define a maximum LTV for new borrowing that sits below the LTV at which Liquidation becomes possible. The gap between those two figures is the entirety of your buffer, and it is narrower than it appears.

• A position opened at the maximum permitted LTV has essentially no margin of safety. A modest adverse price move is sufficient to make it liquidatable.
• Because LTV is a ratio, its sensitivity is non-linear: as a position approaches the liquidation threshold, a given percentage price move produces a progressively larger deterioration in the position's health.
• Interest accrues continuously and raises LTV independently of price. A position that is merely idle drifts toward Liquidation over time.
• A Protocol may lower the maximum LTV or the liquidation threshold for an asset by governance action, which can render a previously comfortable position immediately liquidatable with no price move at all.
• Health factors, safety scores, and similar composite figures presented by Protocols or by our interface are simplifications. They can be accurate and still give you no usable warning.

4Price Oracle Risk

A Protocol cannot observe prices directly. It relies on a Price Oracle — a third-party mechanism that publishes prices on-chain — and it values your Collateral, and decides whether to liquidate you, exclusively by reference to that oracle's figure. Your position is therefore exposed not only to the market, but to the oracle's representation of the market.

• Oracles update at intervals or on deviation thresholds. Between updates, the on-chain price is stale and may differ materially from the price you see on an exchange or in our interface.
• An oracle that halts, reports a failure, or returns a stale value may cause a Protocol to freeze, to misprice your position, or to liquidate positions that were never actually undercollateralized.
• Oracles that derive prices from on-chain liquidity can be manipulated, particularly for thinly traded assets. Oracle manipulation has been used repeatedly to force liquidations and to drain lending protocols.
• Different Protocols use different oracles. The same Collateral may be valued differently, and be liquidatable at different moments, depending on where you posted it.
• We do not operate, select, audit, or monitor any Price Oracle, and we have no ability to correct an incorrect price or to reverse its consequences.

5Liquidation Risk

Liquidation is the risk that dominates all others in collateralized borrowing, because it converts a temporary adverse price move into a permanent, realized loss.

• Liquidation executes automatically when the Protocol's oracle price crosses the threshold. There is no confirmation step, no grace period, no notice, and no discretion.
• Liquidators are competing automated agents. A position typically becomes liquidatable and is liquidated within the same block or the next, leaving no practical window in which to add Collateral or repay.
• A Liquidation Penalty — commonly a discount of several percent to well over ten percent of the Collateral seized — is applied on top of the loss you have already suffered from the price move.
• Partial Liquidation restores your position to a permitted ratio but leaves you exposed to further Liquidation if prices continue to move, potentially incurring the penalty repeatedly on the way down.
• Full Liquidation closes the position outright. Where the Protocol permits it, you may lose Collateral substantially in excess of the obligation being repaid.
• In a severe or fast decline, Collateral may be sold into thin liquidity and the Protocol may end up undercollateralized. Some Protocols socialize the resulting bad debt across users, meaning you can lose value even in a position that was never itself liquidated.
• Liquidation is final on confirmation. No mechanism exists — with us or with the Protocol — to reverse it.

6Interest and Borrowing Cost Risk

Interest accrues on borrowed amounts continuously, typically per block, and compounds. It is charged in the borrowed asset and increases your obligation whether or not you are watching.

• Most Protocols apply variable rates driven by utilization. A rate can multiply within hours if lenders withdraw or borrowers crowd in, and there is no cap you can rely on.
• Accrued but unpaid interest raises your LTV. Over a long enough period, interest alone is capable of pushing an otherwise stable position into Liquidation.
• Where you borrow an interest-bearing or yield-bearing asset, the cost may exceed the yield, producing negative carry that compounds against you.
• Repaying requires an on-chain transaction and a Gas Fee, and requires you to hold the borrowed asset. Sourcing it in a stressed market may itself be expensive or impossible.

7Collateral Asset Risk — Volatility, Illiquidity, and Depegging

Not all Collateral behaves alike, and the characteristics of the specific asset you post determine how survivable your position is.

• Highly volatile assets can traverse the entire gap between your opening LTV and the liquidation threshold in a single candle, and often do so overnight or over a weekend.
• Illiquid or thinly traded assets are dangerous as Collateral in two directions: their oracle prices are easier to manipulate, and Liquidation into a thin order book produces severe slippage that deepens your loss.
• Long-tail assets may be delisted or have their parameters cut by governance at short notice, forcing you to unwind at the worst possible time.
• Stablecoin Collateral is not risk-free. Stablecoins have depegged — sharply and, in some cases, permanently — as a result of reserve shortfalls, redemption freezes, banking failures at the issuer, or algorithmic design failure. A depeg in Collateral instantly raises your LTV; a depeg upward in a borrowed stablecoin does the same.
• Liquid staking tokens, restaking tokens, wrapped assets, and receipt tokens carry the risk of the underlying asset plus the risk that their peg or redemption mechanism breaks, that their issuer is compromised, or that secondary-market liquidity evaporates under stress.
• Bridged and wrapped representations depend on the continuing solvency and security of the bridge. Bridges have been among the most frequently exploited components in this sector.

8Smart Contract and Technology Risk

Collateral posted to a Protocol is held by code. If that code is defective, or if the systems around it are compromised, your Collateral can be lost in full and without recourse.

• Smart Contracts may contain bugs, logic errors, or unsafe assumptions that survive multiple audits. An audit is a point-in-time review, not a warranty.
• Economic exploits — flash-loan attacks, oracle manipulation, donation and rounding attacks, reentrancy — have drained lending protocols of very large sums, including protocols widely regarded as mature.
• Upgradeable contracts, admin keys, and governance processes are themselves attack surfaces. A compromised or malicious upgrade can change a Protocol's behavior after you have deposited.
• Protocols compose with one another. A failure in a dependency — an oracle, a stablecoin, a bridge, a yield source — propagates into positions that appear unrelated to it.
• Front-end and domain compromise, malicious token approvals, address poisoning, and phishing remain widespread. Verify contract addresses against a Protocol's own documentation before you sign.
• We did not author, deploy, audit, or control any Protocol Smart Contract, and we cannot recover assets lost to one.

9Network Congestion and Gas Risk

The ability to save a position depends on the ability to get a transaction confirmed, and precisely when you most need that ability is when it is least reliable.

• Sharp market moves cause network congestion. Gas prices spike, blocks fill, and ordinary transactions sit unconfirmed for extended periods.
• A transaction to add Collateral or repay may fail, be reverted, or confirm after Liquidation has already occurred. Gas is consumed either way and is not refundable.
• If you do not hold enough of a network's native asset to pay gas, you cannot act at all — even where you hold ample Collateral. Keep a gas reserve on every network where you have a position.
• Networks can halt, reorganize, fork, or suffer sequencer or validator outages. Layer-2 networks may experience downtime or delayed bridging that leaves you unable to act while liquidation logic on that network continues to operate.
• Transactions in the public mempool are visible before confirmation and may be front-run or sandwiched, worsening your execution at the moment it matters most.

10Operational and Self-Custody Risk

Because New One is Non-Custodial, the operational security of your position rests entirely with you.

• Loss, theft, or destruction of your recovery phrase results in permanent loss of access to your Wallet and to any position it controls. There is no recovery mechanism and no insurance.
• Anyone who obtains your recovery phrase can withdraw your Collateral, borrow against it, or deliberately cause your Liquidation.
• Every transaction you sign is final. A transaction sent to the wrong address, on the wrong network, or with the wrong parameters cannot be reversed by anyone.
• Alerts and indicators are best-effort and may fail silently. Do not treat their absence as reassurance.
• Device loss, malware, a compromised clipboard, or an unavailable device at a critical moment can each prevent you from acting in time.

11Regulatory and Tax Risk

The legal treatment of collateralized borrowing in Digital Assets is unsettled and is developing at different speeds in different jurisdictions.

• Legislative, regulatory, or judicial action may restrict or prohibit your ability to post Collateral, to borrow, or to hold particular assets, and may do so with immediate effect.
• A Protocol may restrict access by jurisdiction, or may be compelled to cease operating, leaving open positions to be unwound under unfavorable conditions.
• Posting Collateral, borrowing, repaying, and being liquidated may each constitute a taxable event where you live. Liquidation in particular can create a tax liability in a period in which you realized an economic loss.
• Determining, reporting, and paying any tax is your responsibility alone. We do not withhold tax and do not report on your behalf.

12Your Acknowledgment

BY USING THE COLLATERAL FEATURES OF NEW ONE, YOU ACKNOWLEDGE AND AGREE THAT:

• YOU ARE AT LEAST 18 YEARS OLD AND HAVE THE LEGAL CAPACITY TO ENTER INTO THESE COLLATERAL TERMS.
• YOU HAVE READ AND UNDERSTOOD EACH RISK DESCRIBED IN THIS STATEMENT, AND YOU ACCEPT ALL OF THEM.
• CRYPTO FUND LLC IS NOT A CUSTODIAN, LENDER, BORROWER, COUNTERPARTY, SECURED PARTY, OR ADVISER IN RESPECT OF YOUR POSITIONS, AND HAS NO ABILITY TO PREVENT, DELAY, OR REVERSE A LIQUIDATION.
• YOU BEAR THE ENTIRE RISK OF LOSS ARISING FROM YOUR COLLATERAL ACTIVITY, INCLUDING TOTAL LOSS OF THE COLLATERAL YOU POST.
• YOU ARE POSTING ONLY ASSETS YOU CAN AFFORD TO LOSE IN FULL, AND YOU HAVE NOT RELIED ON ANY STATEMENT BY US IN DECIDING TO DO SO.

If you do not accept any part of this Statement, do not use the collateral features. Questions may be directed to support@newone.io.