Disclaimers

Risk Disclaimer

Investing in Managers vault involves risks, and it is essential for investors to understand these before engaging. While Aleph seeks to minimise risks, the following factors are highlighted to investors. Any decision to invest should be based on the consideration of the prospectus as a whole by the investor.

Third-Party Project Risks

Managers may invest collateral assets in third-party DeFi and CeFi opportunities. These projects introduce risks that are outside the direct control of Aleph. Such risks include the operational, financial, and regulatory risks associated with these third-party platforms. Issues such as failure of a protocol, changes in terms, or operational mismanagement can significantly affect the returns on investments.

Collateral Asset Risks

The collateral assets in Manager vaults are deployed across a range of CeFi exchanges and DeFi protocols, each with its own risk profile. Internal factors such as technological failures or operational disruptions within CeFi exchanges and DeFi protocols may further impact the stability and value of the collateral. These assets are subject to potential fluctuations in value, liquidity constraints, and changes in market dynamics and other external factors. In particular, collateral assets may lose value in volatile market conditions, affecting the price of the Underlying. Investors should be aware that the risk of asset devaluation could result in a loss of principal, particularly during periods of significant market stress.

Smart Contract Risks

Aleph infrastructure relies on smart contracts to interact with various DeFi protocols. Although Aleph takes measures to mitigate these risks, such as conducting regular audits, implementing security best practices, and selecting reputable protocols, these measures cannot guarantee complete protection. Additionally, smart contracts may rely on external data sources, which introduce further risks of inaccuracy or manipulation.

Market Conditions and Volatility

Investments are susceptible to market conditions and can experience significant volatility. The value of collateral assets and the yields generated by CeFi and DeFi platforms can be impacted by factors such as general market sentiment, regulatory changes, technological advancements, and macroeconomic events. Market downturns, liquidity shocks, or sudden price movements can affect the ability of Managers to maintain desired returns, and may lead to capital losses or the inability to redeem collateral at expected values. Investors should consider their risk tolerance and time horizon when evaluating exposure to market volatility.

Execution Risks

Execution risk arises from the possibility that Managers may not be able to implement its investment strategy or deploy collateral as intended efficiently. This can result from various factors, such as delays in executing trades, network congestion, or technical failures within the CeFi exchanges and DeFi protocols themselves. Additionally, poor timing or errors in transaction execution can lead to suboptimal returns or direct financial losses. While Aleph works to minimize these risks through automation and efficient systems, execution risks are inherent in any investment strategy.

Liquidation Risks

The collateral assets in the Manager vault are exposed to liquidation risks, especially in the case of leveraged positions or falling asset prices. If the value of the underlying collateral falls below a specified threshold, or if a DeFi protocol enforces a liquidation event due to market movements, assets may be liquidated at unfavorable prices, potentially resulting in partial or complete losses. Aleph works to mitigate this risk as market conditions change, but the inherent volatility in digital asset markets means that liquidation events can still occur, especially during periods of significant market stress.

Regulatory Risks

The DeFi space is still relatively new and is subject to evolving regulations. Changes in regulatory frameworks could impact the operations of DeFi protocols, as well as the ability of Managers to continue deploying capital in these ecosystems. Regulatory scrutiny, especially in jurisdictions where DeFi is not fully regulated, could lead to restrictions or bans on certain activities, causing disruptions in the investment strategy and potential losses for investors.

Liquidity Risks

There is a risk of liquidity issues, particularly during times of market stress. DeFi protocols may experience lower liquidity, higher slippage, or reduced ability to redeem assets quickly. If liquidity is constrained, Aleph may not be able to exit positions or redeem collateral at the expected price, potentially leading to significant losses.

Tracking Error

The value of an investment in a Manager vault may not perfectly reflect or track the value of the Underlying. At any time, the price at which any Underlying trades on exchanges, regulated or unregulated markets within the EEA or abroad or any other exchange or market on which they may be quoted or traded may not accurately be reflected in changes to the value or price of the product.

Operational Risks

Aleph success depends on the effective operation of various internal systems and processes. Any failures or inefficiencies in the operational infrastructure, including risk management, compliance, and reporting systems, could lead to financial losses or mismanagement of the investment strategy. Aleph has implemented operational protocols to minimize such risks, but they remain an inherent part of the operation of any financial platform.

Counterparty Risks

Managers may invest in CeFi platforms and DeFi protocols that may have their own counterparties. These counterparties may include other users, liquidity providers, or external organizations involved in the DeFi ecosystem. There is a risk that these counterparties may not fulfill their obligations, fail to meet financial commitments, or experience insolvency, which could affect the performance. In the event of a counterparty default, Manager's investments may be significantly affected, potentially leading to financial losses, reduced liquidity, or the inability to access or redeem invested assets.

Investment Disclaimer

Not for the distribution to any U.S. Person or any person or address in the United States. Aleph DOES NOT sell tokens to U.S. Persons or for the account or benefit of U.S. Persons, and tokens are not marketed or solicited in the U.S. or in any other prohibited jurisdiction.

These materials are not an offer of or an invitation by or on behalf of Othentic Labs Ltd. (the Company) or any other person to subscribe for or to purchase any products of the Company. These materials are for background purposes only and do not purport to be complete.

No reliance may be placed for any purpose on the information contained in these materials or its accuracy or completeness. The information in these materials is subject to change. Charts and graphs are provided for illustrative purposes. Past performance is not indicative of, and does not guarantee future results. Investing in digital assets including crypto assets is not suitable for every investor as there is a substantial risk of loss, and losses in excess of an initial investment may under certain circumstances occur. Engaging in blockchain transactions and with DeFi protocols involves risks.

The value of an investment in a Vault however may not perfectly reflect or track the value of the Underlying. At any time, the price at which any Underlying trades on exchanges, regulated or unregulated markets within the EEA or abroad or any other exchange or market on which they may be quoted or traded may not accurately be reflected in changes to the value or price of the product.

Nothing in this document constitutes a representation that any investment strategy or investment is suitable or appropriate to an investor’s individual circumstances or otherwise constitutes a personal recommendation. Investments involve risks (in particular market risks, including volatility and potential counterparty risks), and investors should exercise prudence and their own judgment in making their investment decisions.

Any statements contained in this document attributed to a third party represent the Companies interpretation of the data, information and/or opinions provided by that third party either publicly or through a subscription service, and such use and interpretation have not been reviewed by the third party.