Risk Disclosures
Last updated: March 15, 2026
Smart Contract Risk
The KeyBay vault, credit engine, oracle, and related contracts are deployed as WASM binaries on OP_NET (Bitcoin L1). While contracts have been tested and reviewed, smart contracts may contain undiscovered bugs, logic errors, or vulnerabilities that could result in loss of deposited funds. OP_NET is a relatively new execution layer and carries additional platform risk.
Market Risk
Bitcoin is a highly volatile asset. Rapid price declines can trigger liquidation of credit positions, reduce the dollar value of vault deposits, and impact the yield generated by the vault strategy. Target yield ranges (4–10% BTC-on-BTC) are indicative estimates, not guarantees. Actual returns may be lower, zero, or negative.
Liquidation Risk
Credit vault positions are subject to liquidation when the loan-to-value (LTV) ratio exceeds the liquidation threshold (currently 50%). Liquidation incurs a penalty (currently 15% of collateral). Rapid market movements may result in liquidation before you can add collateral or repay debt.
Oracle Risk
The BTC/USD price oracle feeds pricing data to the credit engine. Oracle failures, manipulation, stale prices, or feed delays could result in incorrect liquidation decisions, under-collateralized positions, or other adverse outcomes.
Withdrawal Risk
Withdrawals are processed through a 30-day rolling lock period via the WithdrawalQueue contract. During periods of high withdrawal demand or system pause, access to your funds may be delayed. Emergency pause by administrators can temporarily block deposits and withdrawals.
Counterparty Risk
While KeyBay settles on Bitcoin L1, the vault strategy may involve exposure to counterparties through funding basis trades, lending operations, and options carry positions. Counterparty defaults could impact vault returns.
Protocol & Infrastructure Risk
The Service depends on Bitcoin network availability, OP_NET execution layer uptime, Render hosting infrastructure, and third-party APIs (mempool.space). Downtime, network congestion, or infrastructure failures could prevent you from accessing or managing your positions.
Regulatory Risk
The legal and regulatory landscape for digital assets is evolving. Changes in law or regulation in any jurisdiction could impact the availability of the Service, the legality of certain operations, or the tax treatment of your activities. You are responsible for understanding and complying with applicable laws.
KBY Token Risk
The KBY token is a utility token for platform tier access. It has no guaranteed market value, no buyback obligation, and no promise of price appreciation. The token may become illiquid or worthless. Fee savings from holding KBY depend on continued operation of the platform and your deposit activity. Past fee discounts do not guarantee future benefits.
Operational Risk
KeyBay Capital is operated by a small team. Key-person risk, operational errors, security breaches, or team dissolution could impact the Service. Administrative actions (emergency pause, parameter changes) are controlled by a limited set of authorized keys.
No Insurance
Deposits on KeyBay Capital are not insured by any government agency, deposit insurance program, or private insurer. There is no guarantee of recovery in the event of loss.