There are a few risks associated with tokenized strategies - beyond the risk of the strategy itself (detailed here). It is important that users are aware of these risks before depositing to or acquiring a tokenized strategy. Note that this is not necessarily an exhaustive list.
Execution Risks
Per the Derive docs, for each market, there is a set of oracle inputs used for marking assets when computing margin and liquidations. This data is posted onchain for transparency and available via the public REST API. This data is provided by Block Scholes.
It’s possible that feeds for certain assets (particularly less liquid ones) may have marks that deviate from the true fair value, which can result in suboptimal execution for the strategy vault.
Underlying Collateral Risks
sUSDe: Holding sUSDe carries its own set of risks, including but not limited to smart contract bugs, Ethereum bugs, price fluctuations and key management problems. Please review Ethena's documentation for more details.
weETH: Holding weETH - a Liquid Restaking Token (LRT) - carries its own set of risks, including but not limited to smart contract bugs, Ethereum bugs, restaking penalties, price fluctuations and key management problems. Please review EtherFi's documentation for more details.
Bridge Risk
Transferring assets from one network to another carries risks associated with the underlying bridge provider. In this product, we use Socket as the bridge provider. Please review their documentation for more details.
Smart Contract Risk
Interacting with any smart contract carries the risk of losing access to your funds. The immutable nature of smart contacts makes it difficult and potentially impossible to recover them.