Risks

LCC is a leveraged promise with binding obligations; protocol-wide risk factors are covered in Risks.

Slashing risk. Missing a call obligation slashes your margin into a Dutch auction, where bidders fund the missed amount in exchange for margin at a discount. The auction awards only what it takes to attract fills and the surplus is returned to you; Defaults covers the pricing and the partial and unfilled cases.
The promise is a binding obligation. A $75,000 stake at a 7.5% margin ratio is an obligation to deliver up to $1,000,000 of USDC within the facility's funding window (9 days at launch). A promise that cannot be funded in that window ends in slashing.
Funding with USDC withdrawn from USD3 forfeits future promise fees. The promise fee pays for capital brought in from outside the protocol. Funding a capital call with USDC withdrawn from USD3 positions results in forfeiture of future promise fees on the position; fees continue accruing only while calls are funded with external capital.

Value decline. A non-USDC margin asset can fall in value. Promise sizing, auction awards, and the surplus returned after a slash all track the oracle's valuation.

Unstaking is gated and irrevocable. Minimum staking period, unstake delay, and per-epoch capacity all apply; heavy demand queues into later epochs. You remain callable and slashable until your position exits.
Funded capital has a cooldown. USD3 received from funding is redeemable only after the 35-day cooldown; the full amount unlocks at once when it ends.
Positions are non-transferable. There is no secondary market for an LCC position; the only paths out are unstaking or facility wind-down.

3Jane is fully trusted. It controls call timing and size, tunes risk caps, rotates the margin oracle, and can pause (with no time bound) or shut down a facility. Staking is a decision to trust 3Jane's operation of that facility.
Oracle trust. The margin oracle prices the bond; promise sizing, auction awards, and the surplus-return valuation all depend on it.
Upgrade risk. All facilities share one implementation behind a beacon owned by 3Jane's 7-day timelock; logic changes affect every facility after the public delay.
Eligibility is discretionary. 3Jane may revoke an address's staking eligibility at any time, including after it has staked, if it detects circumvention of counterparty concentration caps or other signals of elevated funding-failure risk. Revocation can extend to an existing position: 3Jane can remove part or all of an address's active promise, returning the paired margin to the staker.

Funded capital is USD3 exposure. Every funded call converts USDC into USD3; from that point the risk is USD3's: the credit performance of the backing portfolio and the USD3 / sUSD3 tranche structure.
Smart-contract risk. LCC is new code, and audits are listed in Resources → Audits.

Last updated 2 days ago