Purpose of This Document
1.1 Overview
This Risk Disclosure document is intended to provide users of the WeWake Finance platform with a clear, honest, and comprehensive overview of the risks associated with using blockchain-based services, participating in token presales, staking digital assets, and interacting with smart contracts. WeWake Finance is committed to transparency — the goal of this document is not to discourage participation, but to ensure that every user makes informed decisions with a full understanding of what they are engaging with.
1.2 No Guarantee of Outcomes
Nothing in this document or anywhere on the WeWake Finance platform constitutes a guarantee of financial return, token value, platform availability, or protocol continuity. Digital asset markets are highly volatile, blockchain protocols are subject to technical risks, and regulatory environments are evolving rapidly. You should only participate with funds and assets that you can afford to lose entirely.
1.3 Who Should Read This
This document is relevant to anyone who: logs in to the WeWake Finance platform, participates in the WAKE token presale, stakes WAKE tokens, interacts with the WeWake L2 network, or uses any WeWake Finance smart contracts or interfaces. Reading this document carefully before any participation is strongly encouraged.
Smart Contract Risk
2.1 Code Vulnerabilities
All WeWake Finance smart contracts — including WAKEToken.sol, WakeStaking, WakeBoundEmissionVault, WakeControlledEmissionVault, WakePresaleMerkleVesting, WakeBeneficiaryVestingVault, and WakeTimelockVault — are software. Software can contain bugs, logic errors, or unforeseen interactions with other contracts. A critical vulnerability could result in partial or total loss of funds stored in or interacting with these contracts.
2.2 Audit Limitations
WeWake Finance conducts third-party security audits of its critical contracts prior to deployment. Audit reports, including scope, version, commit hash, findings, and applied fixes, are published in Appendix B of the Whitepaper. However, audits are not a guarantee of security. Auditors review code at a specific point in time and may not identify every possible vulnerability. New attack vectors may emerge after deployment.
2.3 Immutability
Once deployed, smart contracts on blockchain networks are generally immutable. This means that if a critical bug is discovered after deployment, it may not be possible to fix it without deploying a new contract and migrating funds. WeWake Finance implements timelock-controlled upgrade paths where possible, but cannot guarantee that every vulnerability can be mitigated post-deployment.
2.4 Interaction Risk
Interacting with multiple smart contracts simultaneously — for example, claiming presale tokens and staking them via claimAndStake() — introduces additional complexity. Unexpected interactions between contracts, changes in gas costs, or network congestion could result in failed transactions or unintended outcomes.
Token and Market Risk
3.1 Price Volatility
The value of WAKE tokens and other digital assets is highly volatile. Token prices can increase or decrease substantially within short periods of time, sometimes by 50% or more within a single day. WeWake Finance does not control token market prices and makes no representations or warranties regarding the future value of WAKE tokens.
3.2 Liquidity Risk
There may be periods where WAKE tokens are difficult to buy or sell at a desired price due to low trading volume, limited market depth, or exchange availability. Presale participants should be aware that tokens are subject to a vesting schedule and may not be freely transferable until the applicable vesting cliff and unlock periods have passed.
3.3 Dilution Risk
While WAKEToken.sol is a fixed-supply contract with no owner role, no mint extensions, and no rebasing — meaning no additional WAKE can ever be created — the market value of your holdings may still be affected by the actions of other token holders, including large-scale selling by early participants or changes in staking participation rates.
3.4 Vesting and Lock-up Risk
Presale participants are subject to a vesting schedule: 8% unlocked at TGE, a 2-month cliff, and monthly post-cliff releases over an 18-month total window. During the vesting period, locked tokens cannot be transferred or sold. Market conditions may change significantly during this period, potentially affecting the value of unvested allocations.
3.5 Staking Reward Variability
Staking rewards on WeWake Finance are variable. The annual percentage rate (APR) depends on the total amount of WAKE staked at any given time. As more users stake, the same fixed emission flow is distributed across a larger pool, reducing the individual reward rate. WeWake Finance does not guarantee any specific staking return and historical reward rates should not be used to project future returns.
Protocol and Network Risk
4.1 Sequencer Risk
The WeWake L2 network currently relies on a centralized sequencer to order and include transactions. While the sequencer cannot produce invalid state transitions — all state changes are validated by zk validity proofs settled on Ethereum L1 — it can affect liveness. The sequencer could potentially delay, reorder, or exclude your transactions. WeWake Finance is committed to progressive decentralization of the sequencer role through its published roadmap.
4.2 Prover Risk
Validity proofs for L2 batches are generated by a prover. If the prover experiences downtime or delays, proof submission to Ethereum may be delayed, affecting the finality of your transactions. Prover downtime affects liveness only and does not affect the validity of your on-chain state.
4.3 Bridge Risk
Transferring assets between Ethereum L1 and the WeWake L2 network involves the canonical bridge. Bridge contracts are complex systems that handle significant value and have historically been targets of attacks in the broader blockchain ecosystem. WeWake Finance conducts audits of its bridge implementation, but cannot guarantee that bridge contracts will be free from vulnerabilities indefinitely.
4.4 Ethereum Dependency
WeWake Finance settles validity proofs on Ethereum. Any disruption to the Ethereum network — including significant gas price increases, network congestion, or protocol-level changes — could affect the ability to finalize L2 batches, process withdrawals, or interact with L1 contracts.
4.5 Data Availability Risk
WeWake Finance supports multiple data availability modes, including ethereum_calldata and alternative DA layers. If the chosen DA layer experiences an outage, the availability of transaction data required for state reconstruction could be temporarily affected.
Regulatory and Legal Risk
5.1 Evolving Regulatory Environment
The regulatory status of blockchain technology, digital assets, token sales, and decentralized protocols varies significantly by jurisdiction and is subject to rapid change. Actions by governments, financial regulators, or tax authorities could affect your ability to use WeWake Finance services, transfer or trade WAKE tokens, or realize any financial benefit from participation.
5.2 Jurisdictional Restrictions
WeWake Finance services may not be available in all jurisdictions. Users are solely responsible for ensuring that their participation in the presale, staking, or any other platform activity complies with the laws and regulations applicable in their country or region. WeWake Finance may restrict access to its platform from certain jurisdictions without prior notice.
5.3 Tax Obligations
Participating in token presales, receiving staking rewards, and trading digital assets may have tax implications in your jurisdiction. WeWake Finance does not provide tax advice and makes no representations regarding the tax treatment of any platform activity. You are solely responsible for understanding and fulfilling your tax obligations.
5.4 KYC and AML Compliance
WeWake Finance may be required to collect Know Your Customer (KYC) documentation and implement Anti-Money Laundering (AML) procedures in connection with presale participation or other platform features. Failure to complete required verification may result in restricted access to certain services.
Operational and Custody Risk
6.1 Non-Custodial Architecture
WeWake Finance operates a non-custodial platform. Your assets are held in your own smart account on-chain and WeWake Finance cannot access, freeze, or recover your funds on your behalf. This means that you bear full responsibility for maintaining access to your account through your login credentials and WakeKey recovery shares.
6.2 Key Management Risk
Access to your WeWake Finance smart account depends on the WakeKey MPC system, which uses a 2-of-3 threshold signing scheme. Losing access to two or more of your key shares simultaneously — S_user, S_wake, and S_guard — could result in permanent loss of access to your account and all associated funds. WeWake Finance strongly recommends setting up all recovery options, including email verification and a trusted guardian, before depositing significant value.
6.3 Recovery Limitations
While WakeKey provides multiple recovery pathways, no recovery system is infallible. If you lose access to your primary login method and all recovery shares simultaneously, WeWake Finance may not be able to restore access to your account. The non-custodial design of the platform means that there is no central authority with the ability to override access controls.
6.4 Interface Risk
WeWake Finance provides a web and mobile interface for interacting with the protocol. This interface is a convenience layer — it is not the protocol itself. WeWake Finance may update, modify, or temporarily take down the interface at any time. Users with sufficient technical knowledge can always interact with WeWake Finance smart contracts directly through the blockchain, independent of the platform interface.
WakeGuard and AI Attestation Risk
7.1 Advisory Nature
WakeGuard AI attestations are non-consensus risk signals used by Paymasters and rewards contracts to make policy decisions. These attestations are advisory only and do not affect transaction validity. A transaction that receives a negative WakeGuard signal may be declined for Paymaster sponsorship but remains valid on the network.
7.2 False Positives and Negatives
AI-based risk assessment systems can produce incorrect results. A legitimate user may receive a negative risk signal (false positive), resulting in declined sponsorship or restricted access to certain features. Conversely, a malicious actor may receive a positive signal (false negative). WeWake Finance is committed to improving the accuracy of WakeGuard over time but cannot guarantee perfect risk assessment outcomes.
7.3 Privacy Considerations
WakeGuard attestations are designed to be minimal and privacy-preserving, using hashed identifiers and time-limited validity windows. However, the generation of risk signals involves some analysis of user behavior. Please refer to the WeWake Finance Privacy Policy for full details on how data is processed in connection with WakeGuard.
No Investment Advice
WeWake Finance does not provide investment, financial, legal, or tax advice. All information provided on the platform, in documentation, or through any communication channel is for informational purposes only. Participation in the WAKE token presale, staking, or any other platform activity should be considered carefully and in consultation with qualified financial and legal advisors. WeWake Finance is not responsible for any financial decisions made based on information provided through the platform.
Acknowledgment
By using WeWake Finance services, you acknowledge that you have read, understood, and accepted all risks described in this Risk Disclosure document. You confirm that you are participating voluntarily, with a full understanding of the speculative nature of digital assets and the technical risks associated with blockchain protocols. You agree that WeWake Finance shall not be held liable for any losses arising from risks disclosed in this document.
Contact
If you have questions about any of the risks described in this document, please contact WeWake Finance through the official support channels listed on our website.