8. Risks and Challenges

While Olympus Finance is an innovative project with great potential, it is important to acknowledge that it also faces several risks and challenges. This section outlines the major risks and challenges and discusses the corresponding mitigation measures.

Technical Risks:

• Smart Contract Vulnerabilities: As Olympus Finance operates on smart contracts on Base, there is a possibility of potential bugs and vulnerabilities.

  • Mitigation: Conduct rigorous code audits by multiple independent audit firms and enlist community assistance through bug bounty programs. Also, utilize technologies such as formal verification to improve safety.

• Unpredictability of AI Agents: AI agents may exhibit unintended behavior in response to unpredictable market movements or unexpected user actions.

  • Mitigation: Implement safeguards to limit the scope of AI agent actions and conduct continuous monitoring and improvement. Also, establish a system that allows human intervention in emergencies.

• Dependency on Virtual Protocol and Base: As Olympus Finance relies on Virtual Protocol and Base, it may be affected if these platforms experience failures or issues.

  • Mitigation: Collaborate closely with the development teams of Virtual Protocol and Base to ensure early detection and response to risks. Also, consider future multi-chain deployment to diversify risks.

Market Risks:

• Price Volatility Risk: The price of the $OHM2 token may fluctuate significantly due to the supply and demand balance in the market and the trends in the overall cryptocurrency market.

  • Mitigation: Secure Protocol Owned Liquidity (POL) and utilize AI agent-driven market analysis and risk management functions to stabilize prices.

• Competition Risk: Competition with other DeFi protocols may intensify, posing challenges to user acquisition and market share expansion.

  • Mitigation: Establish competitive advantages through AI agent-driven innovation and community-driven development.

Regulatory Risks:

• Uncertainty in DeFi and AI Regulations: Regulations for DeFi and AI are still under development and may impact the operation of Olympus Finance in the future.

  • Mitigation: Closely monitor regulatory trends in each country and comply with legal requirements. Also, contribute to the formation of sound rules through dialogue with regulatory authorities.

Other Challenges:

• Community Governance: Decentralized governance may lead to slow decision-making and conflicts of interest.

  • Mitigation: Establish clear governance rules and utilize AI agent-driven decision support functions to realize efficient and fair governance.

• User Education: Users need to understand the mechanisms and risks of Olympus Finance.

  • Mitigation: Actively engage in user education by providing easy-to-understand documentation and tutorials.

Conclusion:

Olympus Finance faces the various risks and challenges mentioned above, but these are natural challenges that accompany innovation. We believe that by appropriately managing these risks and overcoming the challenges one by one, we can contribute to the success of the project and the development of DeFi.