# Risks #### **Integration Risk** Babylon integrates with several DeFi protocols (Aave, Kyber, Yearn, etc.) to offer a wide range of investment opportunities. However, this makes us vulnerable to risks in the underlying protocols. For example, an integration may lose capital due to a digital breach; although we have designed the protocol to compartmentalize these risks, making them very unlikely, they may occur and could have detrimental effects. These risks carry varied outcomes of severity and impact. **Ethereum Risk** Babylon is built on top of Ethereum and as such, is vulnerable to bugs or hacks in the Ethereum Virtual Machine or EVM. This is an extremely unlikely event, which would also collapse the value in the whole ecosystem but it can happen. **User Hacks** Our users and customers may be hacked via malicious digital exploits. If the user's OS or browser is compromised, this could generate a loss of funds or, at the very least, negatively impact our application. **Product Risk** Our frontend could have bugs and/or digital breaches that may result in miscalculations, loss of user's funds, and/or prevent users from accessing the protocol. Withdrawals and deposits may be halted as these issues could effect the viability of the platform. **Yield Risk** Right now, risk-free interest rates in DeFi are really high. We expect these numbers to trend lower in the following years although we expect them to remain considerably higher than the rates available in traditional finance. If the numbers become commoditized quickly and the transaction costs increase, many investment opportunities in DeFi wouldn't be as profitable. This can effect the long-term viability of the platform. **Malicious Garden Takeovers** Gardens may be controlled by large capital manipulation. Although these kinds of attacks are highly disincentivized by our mechanism and design, individuals willing to pay a high price could take over a Garden and activate investment Strategies that could result in the loss of a user's capital investment. Similar to a 51% attack in Bitcoin, engaging in this type of exploit is a negative-sum game where both the attacker and the members of the community would lose capital. **Smart Contract Risks** Although we do our best to employ the best security practices, there is always a risk that Babylon suffers a digital breach that could compromise user capital. It is also possible for an attacker to compromise the Babylon governance system and change protocol parameters or upgrade the main controller with the goal of accessing capital from our users. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.babylon.finance/security/risks.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.