> For the complete documentation index, see [llms.txt](https://deerfi-global.gitbook.io/deerfi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://deerfi-global.gitbook.io/deerfi/risks.md).

# Risks

Official Website: https\://DeerFi.io/

**Like any leveraged loan, Deerfi carries its own risks. The following is an overview of some of the risks that each protocol user may be faced with:**

1\. High-yielding farmers and liquidity providers (unleveraged) face a risk of impermanent loss. Note: This is just as risky as participating in other farming or liquidity opportunities in the AMM pool.

2\. Leveraged income farming and liquidity providers (more than double) also have the risk of liquidation; DeerFi will borrow currency to generate farming income or provide you with leveraged liquidity. Liquidation occurs when the debt ratio (debt/position value) reaches the liquidation debt ratio. For example, 80% of the BNB / DAI pool, which may occur when the value of your position declines. The value of the position decreases when the price of another token (e.g. DAI / BNB pool) falls significantly compared to BNB or BNB price increases significantly compared to another token. \*Please refer to the key parameters section to see what the clearing debt ratio is for each pool.

3\. If the liquidator does not liquidate in time, the moneylender bears potential debt risks. 

**Note: This has never happened.**

4\. The liquidator takes the risk of being front-run by other competitors and obtains the reward bonus from the liquidation to reinvest. If being front-run, the liquidator does not need to pay gas fees (likely due to the high gas prices).