Risk overview
What a Tuo position is exposed to. Start here before depositing.
Your capital is at risk. A Tuo position can lose money. The hedge reduces price exposure; it does not remove it. Every return figure in these docs is a backtest target over past market data, not a forecast. The contracts have not yet been independently audited, and the first mainnet deployment has not happened. Do not deposit funds you cannot afford to lose.
Tuo earns Uniswap V3 trading fees from concentrated liquidity and hedges most of the price exposure that liquidity carries with short perpetuals on Hyperliquid. That structure has four distinct families of risk. Each has its own page, written to be specific to how Tuo is built rather than a generic list.
| Family | The short version | Page |
|---|---|---|
| Market and strategy | Hedged is not neutral. Ranges stop earning out of range. Funding cuts both ways. A short can be liquidated. Targets are backtests | Market and strategy risk |
| Counterparty and venue | The whole hedge sits on one venue, at a Tuo-operated account, reached through a bridge. USDC is an issuer's token | Counterparty and venue risk |
| Smart contract and oracle | Immutable contracts with no upgrade path, priced from pool TWAPs with no external oracle, not yet externally audited | Smart contract and oracle risk |
| Operational | A compromised or faulty keeper is rate-limited, not stopped, until Tuo revokes it. One backend, one engine, one team | Operational risk |
What Tuo can and cannot do to your position
The single most useful fact for weighing these risks: no Tuo role can move funds off your position anywhere except back to you. The keeper can reshape a position inside the vault and move hedge margin to the position's bound Hyperliquid account. It cannot send funds to any other address, cannot exceed 10 actions per position per day, and cannot cause more than 1.5% of the position's basis in measured loss per day inside the vault. The treasury cannot change the fee, upgrade the contracts, touch a position or stop a withdrawal.
The important exception is the hedge leg. While a short is open, its margin (up to 50% of basis for Basis Plus Core, up to 90% for Delta Hedge Standalone) is held at a Tuo-controlled address on Hyperliquid, outside the vault's custody. That is the risk to understand first. See Custody model.
What you can always do
- Request and complete a withdrawal in two transactions from your wallet, once the hedge is closed and the margin is back. Tuo has no veto.
- Emergency-exit 24 hours after a withdrawal request, recovering everything on-chain in kind, regardless of market conditions or whether Tuo is online. Outstanding hedge margin becomes a claim the keeper settles separately.
- Transfer the position NFT to any wallet. Whoever holds it owns the position.
See Withdrawals.
Every page in this section is kept in step with the contracts and the engine. When a number here disagrees with the vault, the vault is right; tell us.