Trading on 4rho involves substantial risk

The 4rho prediction-market exchange (the "Service") is a non-custodial peer-to-peer trading venue built on the Polygon PoS network. Trading on the Service involves substantial risk, including the risk that you may lose the entire amount of any USDC collateral you commit to a position. Prices are volatile, liquidity is not guaranteed, and outcomes can resolve against you.

The Service is non-custodial: [ENTITY_NAME] does not hold your funds, your private keys, or your Outcome Tokens. You are solely responsible for the security of the wallet you use to interact with the Service, and for the trading decisions you make.

Nothing on the Service constitutes investment, financial, legal, or tax advice. The information presented on the Service — including prices, implied probabilities, market data, and any descriptions of how a market resolves — is for informational purposes only. You should consult a qualified professional before making any decision to trade.

This Risk Disclosure expands on the risk acknowledgements in Section 7 of our Terms of Service at /legal/terms and is incorporated into those Terms by reference. By using the Service, you acknowledge and accept each of the risks described below.

1. Smart contract risk

The Service is mediated by Solidity smart contracts deployed on the Polygon PoS network, including without limitation Exchange.sol, MarketFactory.sol, the Gnosis Conditional Tokens Framework, and FeeSweeper.sol (the "Smart Contracts"). The source code is published at https://github.com/4rho/4rho/blob/main/contracts/polygon/.

The Smart Contracts have not, as of the date of this disclosure, been formally audited by an independent third-party security firm. Smart contracts are software, and software contains bugs. A bug, design flaw, or unanticipated interaction in the Smart Contracts could result in:

the loss, lock-up, or theft of any USDC collateral or Outcome Tokens you hold;
incorrect settlement of trades, including settlement at the wrong price or to the wrong account;
the inability to cancel an Order, withdraw collateral, or redeem an Outcome Token;
incorrect Resolution of a market.

The Smart Contracts are deployed on a public blockchain. Once deployed, their on-chain logic is, with narrow exceptions described in our documentation, immutable; bugs can typically be remediated only by deploying replacement contracts and migrating users, which may take time and may not be possible in every case. You may have no recourse against [ENTITY_NAME] or any third party if a bug or exploit causes you to lose funds.

2. Polygon network and operational risk

The Service depends on the continued availability and correct operation of the Polygon PoS network and the supporting infrastructure (application hosting, RPC providers, sequencers, and validators). Risks inherent to that dependency include:

Congestion and gas spikes — at times of high network demand, gas prices may rise sharply or transactions may take a long time to confirm. Settlement of a matched Order, deployment of a market, or redemption of an Outcome Token may be delayed.
RPC and infrastructure failures — outages at our RPC provider, hosting provider, or other infrastructure dependencies may make the Service temporarily unavailable.
Reorganizations — the Polygon PoS chain may experience brief reorganizations, during which a transaction that appeared confirmed is reverted and re-included in a different block.
Validator behavior — the security and liveness of the network depend on the behavior of its validator set. A failure of consensus, a successful attack on the network, or a chain halt could affect the Service.
Operational pauses — [ENTITY_NAME] may pause new Order placement, market deployment, or other administrative functions to respond to a security incident, infrastructure outage, or regulatory event. While trading is paused, your existing on-chain positions remain in your wallet, but you may be unable to enter or exit positions through the Service.

3. Market and liquidity risk

The Service operates as a hybrid central limit order book: Orders are matched off-chain by [ENTITY_NAME] and settled on-chain by the Smart Contracts. The market price for an Outcome Token reflects the most recent matched trade and may move sharply based on news, order-book dynamics, or low-volume events.

You should expect:

Volatility — Outcome Token prices can move by large percentages in short periods, including immediately before, during, and after a scheduled resolution event.
Total loss — at Resolution, the losing Outcome Token has no redemption value. A position you hold can lose 100% of its value.
Thin or one-sided books — many markets, especially newly listed markets and markets approaching resolution, may have a thin order book or no resting orders on one side.
RFQ states — the Service displays "RFQ" (Request for Quote) when no liquid two-sided market is available. RFQ is a signal that you cannot expect to enter or exit a position at a fair price, and you may be unable to trade the market at all. See /help/trading/rfq.
Slippage — large orders may move the price significantly, resulting in fills at prices materially worse than the displayed top of book.

4. Resolution risk

Each market resolves based on the data source and resolution criteria identified in the market specification. After the scheduled close, the Operator proposes a Resolution by calling MarketFactory.proposeResolution, which opens a documented timelock window during which the proposal may be cancelled in narrow circumstances (for example, if new information indicates the proposal was incorrect, if the underlying data source returned a manifestly erroneous value, or if the market specification is ambiguous on its face). If the Operator does not cancel within the timelock, the Resolution is finalized and recorded on-chain.

You should be aware that:

Resolution may be unexpected — markets may resolve in ways you did not anticipate, including based on technicalities of the market specification or the underlying data source.
The timelock is a guardrail, not a guarantee — the timelock provides time for the Operator to identify and cancel an incorrect proposal, but it does not guarantee that every Resolution will be correct.
Finality is final — once a Resolution is finalized on-chain, it cannot be reversed by [ENTITY_NAME]. Disputes about a proposed Resolution must be raised through the in-app support inbox before the timelock expires.
Operator dependence — the Operator role is currently performed by [ENTITY_NAME]. The Operator's availability, judgment, and integrity affect the timeliness and correctness of Resolutions.

See the timelock documentation at /help/resolution/timelock for further detail.

5. Self-custody risk

The Service is non-custodial. Your USDC collateral and Outcome Tokens are held in your own wallet, not by [ENTITY_NAME]. This design protects you from the failure of [ENTITY_NAME] but transfers the responsibility for safeguarding your assets to you.

You are solely responsible for:

Wallet credentials — for self-custodial wallets such as MetaMask, the seed phrase or private key controlling your wallet. Loss or disclosure of your seed phrase means loss or compromise of your funds, with no recovery path.
Email access — for embedded wallets provisioned through Privy, continued access to the email address you used to sign in. Loss of that email account may permanently lock you out of the embedded wallet.
Device security — keeping the device you use to access the Service free from malware and unauthorized access.
Phishing resistance — verifying that you are interacting with the genuine 4rho Service at https://4rho.com and not a phishing clone, and confirming the contents of every wallet-prompt before signing.

[ENTITY_NAME] cannot recover lost private keys, lost seed phrases, or lost embedded-wallet email access. Funds sent to a wrong address are permanently lost.

6. Counterparty risk

The Service matches your Order against an Order placed by another User. Your fill is a peer-to-peer trade, not a trade against [ENTITY_NAME]. [ENTITY_NAME] is not a counterparty to your trades and does not act as a market maker. There is no insured pool of capital backing your position. If liquidity dries up, you may not be able to find a counterparty willing to take the other side of your trade at any price.

Aggregate liquidity on the Service is provided by Users acting on their own behalf. The depth and tightness of the order book in any given market depend on the willingness of those Users to commit capital, which can change rapidly.

7. Regulatory risk

Prediction markets are a developing legal category. The legal, regulatory, and tax treatment of online prediction markets, of the Outcome Tokens you trade, and of the Service itself may change over time and may differ between jurisdictions. Specifically:

Jurisdictional restrictions — access to the Service may be restricted, in whole or in part, in your jurisdiction at any time and without notice.
Compliance is your responsibility — you are solely responsible for verifying that your access to and use of the Service is lawful in your jurisdiction. [ENTITY_NAME] does not provide jurisdiction- specific legal advice and does not warrant that the Service is available, lawful, or appropriate in your jurisdiction.
Sanctions — the Service is not available to persons in comprehensively sanctioned jurisdictions or to persons identified on sanctions lists administered by OFAC, the United Nations, the European Union, the United Kingdom's HM Treasury, or other applicable authorities. See Section 3 of the Terms of Service.
Forced suspension — if a regulator or court orders [ENTITY_NAME] to suspend or terminate the Service, in whole or in part, we will comply, and your access may be interrupted or terminated as a result.

8. Tax risk

Trading Outcome Tokens may have tax consequences in your jurisdiction. Depending on where you are tax-resident, fills, redemptions, and realized gains or losses on the Service may be treated as ordinary income, capital gains, gambling winnings, or another category. In the United States, Internal Revenue Service Notice 2014-21 provides general guidance on the tax treatment of virtual currency, but the application of that guidance to peer-to-peer prediction markets is not settled.

[ENTITY_NAME] does not provide tax reporting, tax forms, or tax advice. The Service does not file Form 1099, Form W-9, or any equivalent foreign tax form on your behalf. You are solely responsible for:

characterizing your activity on the Service for tax purposes;
maintaining records of your fills, redemptions, and realized gains or losses sufficient to support your tax filings;
reporting and paying any tax owed; and
complying with any other tax obligation in your jurisdiction.

You should consult a qualified tax professional before trading on the Service.

9. No FDIC, SIPC, or similar insurance

USDC collateral and Outcome Tokens held in your wallet, on the Polygon Network, or in connection with the Service are not insured by the United States Federal Deposit Insurance Corporation (FDIC), are not covered by the Securities Investor Protection Corporation (SIPC), and are not covered by any equivalent deposit-insurance or investor-protection scheme in any other jurisdiction.

USDC is a stablecoin issued by a third party. Its peg to the U.S. dollar depends on the issuer's reserves and operational integrity. A failure of the USDC issuer or its reserves could cause USDC to lose its peg, with consequences for any USDC collateral you hold.

10. Not investment advice; no fiduciary duty

[ENTITY_NAME] is not a registered investment adviser, broker-dealer, futures commission merchant, swap dealer, commodity-pool operator, or similar regulated entity in any jurisdiction. Nothing on the Service should be construed as a personalized recommendation, solicitation, or offer to enter into any trade.

[ENTITY_NAME] does not act as your fiduciary and does not owe you any duty of suitability, best execution, or care beyond what is expressly provided in these documents. The information surfaced on the Service — including market lists, descriptions, suggested categories, "trending" indicators, and any educational content — is selected to help you navigate the Platform and is not investment advice.

11. Acknowledgement

By using the Service, you acknowledge that you have read and understood this Risk Disclosure, that you accept each of the risks described above, and that you have made your own independent assessment of the suitability of trading on the Service for your circumstances. If you do not understand or do not accept any of these risks, you should not use the Service.

If you have questions about any of the risks described above, please contact us through the in-app support inbox at /support/tickets/new before placing any Order.

Trading on 4rho involves substantial risk

1. Smart contract risk

the loss, lock-up, or theft of any USDC collateral or Outcome Tokens you hold;
incorrect settlement of trades, including settlement at the wrong price or to the wrong account;
the inability to cancel an Order, withdraw collateral, or redeem an Outcome Token;
incorrect Resolution of a market.

2. Polygon network and operational risk

Congestion and gas spikes — at times of high network demand, gas prices may rise sharply or transactions may take a long time to confirm. Settlement of a matched Order, deployment of a market, or redemption of an Outcome Token may be delayed.
RPC and infrastructure failures — outages at our RPC provider, hosting provider, or other infrastructure dependencies may make the Service temporarily unavailable.
Reorganizations — the Polygon PoS chain may experience brief reorganizations, during which a transaction that appeared confirmed is reverted and re-included in a different block.
Validator behavior — the security and liveness of the network depend on the behavior of its validator set. A failure of consensus, a successful attack on the network, or a chain halt could affect the Service.
Operational pauses — [ENTITY_NAME] may pause new Order placement, market deployment, or other administrative functions to respond to a security incident, infrastructure outage, or regulatory event. While trading is paused, your existing on-chain positions remain in your wallet, but you may be unable to enter or exit positions through the Service.

3. Market and liquidity risk

You should expect:

Volatility — Outcome Token prices can move by large percentages in short periods, including immediately before, during, and after a scheduled resolution event.
Total loss — at Resolution, the losing Outcome Token has no redemption value. A position you hold can lose 100% of its value.
Thin or one-sided books — many markets, especially newly listed markets and markets approaching resolution, may have a thin order book or no resting orders on one side.
RFQ states — the Service displays "RFQ" (Request for Quote) when no liquid two-sided market is available. RFQ is a signal that you cannot expect to enter or exit a position at a fair price, and you may be unable to trade the market at all. See /help/trading/rfq.
Slippage — large orders may move the price significantly, resulting in fills at prices materially worse than the displayed top of book.

4. Resolution risk

You should be aware that:

Resolution may be unexpected — markets may resolve in ways you did not anticipate, including based on technicalities of the market specification or the underlying data source.
The timelock is a guardrail, not a guarantee — the timelock provides time for the Operator to identify and cancel an incorrect proposal, but it does not guarantee that every Resolution will be correct.
Finality is final — once a Resolution is finalized on-chain, it cannot be reversed by [ENTITY_NAME]. Disputes about a proposed Resolution must be raised through the in-app support inbox before the timelock expires.
Operator dependence — the Operator role is currently performed by [ENTITY_NAME]. The Operator's availability, judgment, and integrity affect the timeliness and correctness of Resolutions.

See the timelock documentation at /help/resolution/timelock for further detail.

5. Self-custody risk

You are solely responsible for:

Wallet credentials — for self-custodial wallets such as MetaMask, the seed phrase or private key controlling your wallet. Loss or disclosure of your seed phrase means loss or compromise of your funds, with no recovery path.
Email access — for embedded wallets provisioned through Privy, continued access to the email address you used to sign in. Loss of that email account may permanently lock you out of the embedded wallet.
Device security — keeping the device you use to access the Service free from malware and unauthorized access.
Phishing resistance — verifying that you are interacting with the genuine 4rho Service at https://4rho.com and not a phishing clone, and confirming the contents of every wallet-prompt before signing.

[ENTITY_NAME] cannot recover lost private keys, lost seed phrases, or lost embedded-wallet email access. Funds sent to a wrong address are permanently lost.

6. Counterparty risk

7. Regulatory risk

Jurisdictional restrictions — access to the Service may be restricted, in whole or in part, in your jurisdiction at any time and without notice.
Compliance is your responsibility — you are solely responsible for verifying that your access to and use of the Service is lawful in your jurisdiction. [ENTITY_NAME] does not provide jurisdiction- specific legal advice and does not warrant that the Service is available, lawful, or appropriate in your jurisdiction.
Sanctions — the Service is not available to persons in comprehensively sanctioned jurisdictions or to persons identified on sanctions lists administered by OFAC, the United Nations, the European Union, the United Kingdom's HM Treasury, or other applicable authorities. See Section 3 of the Terms of Service.
Forced suspension — if a regulator or court orders [ENTITY_NAME] to suspend or terminate the Service, in whole or in part, we will comply, and your access may be interrupted or terminated as a result.

8. Tax risk

characterizing your activity on the Service for tax purposes;
maintaining records of your fills, redemptions, and realized gains or losses sufficient to support your tax filings;
reporting and paying any tax owed; and
complying with any other tax obligation in your jurisdiction.

You should consult a qualified tax professional before trading on the Service.

9. No FDIC, SIPC, or similar insurance

10. Not investment advice; no fiduciary duty

11. Acknowledgement

If you have questions about any of the risks described above, please contact us through the in-app support inbox at /support/tickets/new before placing any Order.