Risk Disclosure (Master)

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Operator and jurisdiction: BASIS is operated by BASIS DIGITAL INFRASTRUCTURE LTD, a Seychelles IBC (LEI: 254900IX2F2KCWNSSS64arrow-up-right).

Currency convention: Dashboard values can be displayed in USDT as an internal accounting reference. USDT is not depositable or withdrawable. Supported assets: BTC, ETH, SOL, and PAXG.

BASIS seeks to generate market-neutral yield through proprietary execution systems, structured staking design, and structural alpha capture. However, like all digital asset systems and financial infrastructures, BASIS is exposed to risk.

This document is written in a control-manual style. The objective is to make risks explicit, testable, and understandable.

1) General disclaimer

  • Digital asset markets are dynamic and subject to rapid change.

  • Historical performance figures are illustrative and reflect past conditions only.

  • BASIS targets yield through market-neutral execution and deterministic risk controls. Actual results depend on realized strategy performance.

  • Dashboard valuations can be shown in USDT as a reference unit, interpreted as a USD-equivalent estimate.

  • USDT is used for internal accounting and display only. It is not supported for deposit or withdrawal.

  • Supported asset flows are native-token based:

    • BTC deposit via a BASIS-assigned address unique to each account

    • ETH, SOL, and PAXG deposit via connected Web3 wallets

  • Swaps on BASIS are same-token only and 1:1:

    • BTC → stBTC

    • ETH → stETH

    • SOL → stSOL

    • PAXG → stPAXG

  • BASIS operates with institutional-grade control objectives supported by active, internationally accredited ISO/IEC 27001:2022 and ISO/IEC 20000-1:2018 certifications held by BASIS DIGITAL INFRASTRUCTURE LTD and publicly verifiable on IAF CertSearch. Certification supports governance and operational discipline, but does not eliminate market, technical, or counterparty risk.

2) Core principle: quantity preservation vs valuation risk

BASIS is designed to preserve and grow asset quantity through:

  • 1:1 conversion between native assets and staking tokens

  • distribution of realized rewards in the same stToken

  • automatic crediting of unstaked claimable amounts into the Staking Wallet

However, BASIS does not guarantee the USDT valuation, USD valuation, or market price of the underlying asset.

Users should distinguish between:

  • "I hold more BTC, ETH, SOL, or PAXG"

  • and

  • "the displayed USD-equivalent value of that asset is stable"

These are not the same.

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3) Risk categories (summary)

  1. Market volatility risk The market value of BTC, ETH, SOL, or PAXG can decline materially.

  2. Reference unit risk USDT can deviate from USD, and dashboard valuations shown in USDT might not match executable market value.

  3. Operational strategy risk Execution failures, slippage spikes, partial fills, routing errors, timing mismatches, or venue-side interruptions can reduce expected performance.

  4. Third-party venue risk Exchanges, custodial venues, counterparties, infrastructure providers, or liquidity venues could impose withdrawal halts, experience insolvency, suffer hacks, or face regulatory restrictions.

  5. Technical risk Wallet errors, account security failures, chain instability, software defects, network failures, oracle dependency issues, or smart contract risk where applicable can impair operations.

  6. On-chain execution risk Gas spikes, congestion, failed transactions, adverse ordering effects, and reduced execution precision impact DEX-related or wallet-based activity.

  7. Liquidation and margin risk Derivative hedges or related positions become subject to liquidation if margin is insufficient or if market movements exceed modeled tolerances.

  8. Liquidity and unwind risk Position exits can require time, especially during stressed market conditions. Fixed pools are only eligible to be unstaked after the lock-up period ends, with no early exit option.

  9. Settlement and transfer risk Deposits sent to incorrect addresses, unsupported networks, or incorrect wallet configurations risk being delayed, rejected, or unrecoverable.

  10. User workflow risk Errors in wallet connection, asset selection, staking actions, withdrawal destination selection, or misunderstanding of the two-wallet model can lead to loss or delay.

4) BASIS protective mechanisms (summary)

BASIS mitigates risk through a layered control framework supported by deterministic execution, mathematical constraints, and state-machine-based risk controls.

Control systems

  • BSCB (Sentinel Circuit Breaker) A protective trigger that halts strategy activity and initiates controlled position reduction when loss thresholds or abnormal conditions are detected.

  • DMM (Defensive Maintenance Mode) A controlled pause state for unwind procedures, root-cause analysis, reconciliation, and stable resumption.

  • Liquidity fragmentation Distribution of capital and execution across multiple venues to reduce single-venue dependency.

  • Controlled unstaking structure Fixed pools are subject to lock-up periods and can only be unstaked after the lock-up ends. This supports orderly liquidity management and reduces forced unwind pressure.

  • Two-wallet segregation Funding Wallet holds native assets for deposit and withdrawal. Staking Wallet holds stTokens for staking and reward accrual. This separation improves accounting clarity and operational control.

Infrastructure controls

BASIS execution infrastructure is designed around:

  • BHLE architecture

  • sub-50μs latency

  • 100K+ OPS throughput

  • proprietary routing infrastructure

  • deterministic execution paths

  • state-machine-enforced guardrails

  • security and service management processes aligned with the active ISO/IEC 27001:2022 and ISO/IEC 20000-1:2018 certifications held by BASIS DIGITAL INFRASTRUCTURE LTD

These measures are intended to improve execution precision and structural alpha capture under normal and stressed market conditions. They reduce risk but do not eliminate it.

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Research and systems design are informed by Base58 Labs, acting as Research Partner. Technical sophistication and internationally certified management systems improve control quality, but do not guarantee profit or eliminate loss.

5) Product mechanics relevant to risk

Understanding core product behavior is part of risk management.

Topic
BASIS rule

Deposit assets

BTC, ETH, SOL, PAXG only

USDT

Internal accounting/display unit only

BTC deposit method

Copy your BASIS-assigned unique BTC address

ETH/SOL/PAXG deposit method

Connect a supported Web3 wallet

Swap model

Same-token only, 1:1 native asset to stToken

Rewards

Accumulate in real time as the same stToken in the Staking Wallet

Unstake

Full position only, auto-MAX

Claim after unstake

Auto-credited to Staking Wallet as stToken

Fixed pools

No early exit, unstake only after lock-up ends

Withdrawal fee

0.05%

Swap fee

0.01%

Deposit fee

0%

Wallet model

Wallet
Purpose

Funding Wallet

Holds native tokens for deposit and withdrawal

Staking Wallet

Holds stTokens for staking and reward accumulation

Misunderstanding this structure can result in confusion regarding balances, claimability, or transferability.

6) User responsibilities

Before using BASIS, users should:

  • understand the two-wallet model

  • understand that native assets and staking tokens are linked through same-token 1:1 swap mechanics

  • understand that dashboard values shown in USDT are reference estimates only

  • understand that USDT cannot be deposited or withdrawn

  • review risk disclosures relevant to the asset being used, including PAXG if applicable

  • verify deposit methods before transferring assets:

    • BTC via the BASIS-assigned account address

    • ETH, SOL, and PAXG via supported Web3 wallet connection

  • understand that active, internationally accredited ISO certifications support information security and service management governance, and that the public certification records are available on IAF CertSearch, but these certifications do not constitute a guarantee against loss

  • begin with conservative allocation and test workflows carefully

  • verify all wallet addresses, networks, and transaction details before confirming

1

Review the asset flow for your chosen token

2

Confirm whether you are depositing via BTC address copy or Web3 wallet connection

3

Verify that you understand staking, unstaking, and withdrawal constraints

4

Proceed only after confirming operational and market risks are acceptable to you

7) No guarantee

BASIS does not guarantee:

  • principal preservation

  • uninterrupted platform availability

  • continuous liquidity under all market conditions

  • stable USD-equivalent valuation

  • specific yield outcomes

  • protection from third-party failures

  • error-free blockchain settlement

  • immediate exits from fixed-term positions

Use of the platform involves real financial and technical risk.


Proceed to the next pages in this section for detailed disclosures.

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