# Risks

**Smart contract risk.** Liquid Finance smart contracts have not yet been audited. There’s always the possibility of a bug or vulnerability that compromises participants’ funds. It may not be possible to recover these funds.

**Slashing risk.** Liquid Finance delegates user's voting power from their staked ARCH across a whitelisted validator set. If a validator fails to perform their job efficiently and gets penalized via slashing of staked funds the stake pool would decrease in value. It may not be possible to recover these funds.


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