Risk Management and Architectural Safeguards

Boundary AML Instead of Total Transfer Control

The protocol controls mint and cash-out boundaries, but does not promise that every secondary wrapper token transfer itself undergoes AML review. This is an honest caveat: the free transferability of the wrapper is achieved by moving control to the system's boundaries.

Controlled Strategy Outflow

Strategies cannot send funds to arbitrary addresses. Capital withdrawal to the external execution layer is only possible to pre-approved receiver addresses and within outstanding exposure limits.

Timelock-Governed Upgrades

EarnPark maintains a governance approach under which contract upgrades must not happen unexpectedly. Upgrades go through a governance path and timelock, while stress management paths are supplemented by a pause model and change management discipline.

Explicit Strategy Liabilities

When a user redeems a strategy, their shares are immediately burned and converted into an asset-denominated liability. This does not eliminate market risk, but makes obligations transparently measurable.

An Honest Risk Framework

The protocol's main risks fall into four areas:

• quality and resilience of external strategies;

• quality of the reserve venue and its instant liquidity;

• governance and limit configuration;

• AML signer / compliance operations.

The protocol does not conceal these risks. Its goal is to make them isolated and observable.