Key risks
A plain account of what can go wrong when you hold or transact EVE. None of these risks are downplayed.
Testnet only
Everstrat is on Sepolia testnet. Tokens have no monetary value. The deployment may be reset at any time. Do not send real funds.
Understanding these risks is part of using the protocol. Each one is described plainly below — what it is and what it means for you.
NAV can fall
EVE's value tracks the portfolio's net asset value (NAV). If the strategy portfolio loses value, every EVE token is worth less ETH. There is no principal protection, no floor price, and no guarantee of recovery.
Your ETH is deployed into on-chain strategies. Those strategies can produce losses. When they do, the NAV falls and so does the ETH you would receive on exit.
Impermanent loss
The current active strategy (UniCLStrat) provides concentrated liquidity on Uniswap V3. In volatile markets, concentrated LP positions can underperform simply holding the underlying assets — this is impermanent loss.
Impermanent loss is not a failure of the protocol; it is an inherent property of providing liquidity across a price range. If the market moves sharply, you may exit with less ETH-equivalent value than if you had held outside the protocol.
Single-strategy concentration
Today essentially all pooled capital flows into one strategy: UniCLStrat. That strategy's performance is your performance — if it performs poorly, there is no diversification to cushion the impact.
More strategies may be added in future, which would change this profile — but that change requires governance action and is not guaranteed.
Exit queue delays
If the AMM does not have enough free ETH to fulfil your exit immediately, your exit request is placed in a queue. You may have to wait for the keeper bot to process it. If the keeper goes offline, your ETH is not immediately accessible.
The protocol provides an escape hatch: if a batch has been priced for more than 3 days without being
processed, you can call cancelRedemption to recover your EVE tokens. You receive EVE back — not ETH.
You would then need to attempt a new exit.
The escape hatch is also available at any time before a batch has been priced (no time constraint applies then).
Queued-exit slippage
When your exit is queued, the price used for settlement is determined later — when the keeper prices
the batch. If the EVE price at settlement has fallen more than your chosen priceTolerance below the
price at request time, the request is closed and your EVE is returned. You do not exit that round and
must try again.
Setting a wider priceTolerance makes settlement more likely but exposes you to more price movement.
Setting it narrow protects you from settlement at a much worse price, but increases the chance of your
request being closed.
Oracle dependence (limited)
Normal deposits and withdrawals do not use the oracle. However, the oracle is used for:
- The bootstrap USD minimum check ($1,000 minimum initial deposit)
- USD-denominated price views in the frontend
- Strategy asset valuation within UniCLStrat
If the Chainlink price feed becomes stale or malfunctions, these paths can be blocked. Deposits and redemptions that trigger these checks would be unavailable until the feed recovers.
Fail-closed freeze
If any registered strategy cannot report its NAV — because its navInETH() function reverts — the
entire protocol freezes. Deposits, withdrawals, and price updates all stop until the strategy is
fixed or removed by governance (which requires the 48-hour timelock).
This is an intentional safety feature: the protocol will not process entries or exits at a price it cannot verify. The downside is that a malfunctioning strategy causes temporary unavailability for all users, not just those in that strategy.
Price-deviation guard
Each deposit and withdrawal checks the current EVE price against a recent checkpoint. If the price has
moved more than the configured maximum (default 5%, maximum 20%) since the last checkpoint, the
transaction reverts. This prevents exploitation of sudden price swings, but it also means transactions
can fail during genuine market volatility. Recovery requires ADMIN_ROLE or SECURITY_ROLE to reset
the checkpoint.
Testnet status
This deployment is on Sepolia. EVE tokens have no monetary value. The entire deployment may be reset, redeployed with different parameters, or taken offline at any time. No aspect of this protocol should be treated as a production, real-money system until explicitly announced otherwise.
For how the protocol's roles and governance controls work, see Trust & governance. For the security model and audit status, see Security & audits.
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