10.2 Platform Ecosystem Risks

Malicious Platform Registration

Risk:

Bad actors may register platforms with intent to:

• Create fraudulent or misleading markets

• Manipulate market outcomes

• Damage protocol reputation

• Extract value through fake volume

Mitigation:

• 7-day community review period

• PATH staker veto mechanism

• Minimum stake requirement (economic deterrent)

• Slashing for provably malicious behavior

• Reputation tracking system (future)

Residual Risk:

Sophisticated attackers with sufficient PATH stake could bypass initial review, requiring ongoing monitoring and governance intervention.

Platform Abandonment

Risk:

Platforms that create markets may abandon them, leaving orphaned markets without ongoing support or promotion.

Impact:

• Markets remain functional (on-chain)

• Other platforms can still list these markets

• Users can still trade

• Platform's earned fees remain claimable

Mitigation:

• All markets are public (any platform can list)

• Markets are fully autonomous on-chain

• No dependency on platform infrastructure

Residual Risk:

Minimal, as markets are self-sustaining. Primary impact is reduced promotion/marketing for abandoned markets.

Fee Distribution Complexity

Risk:

4-tier fee distribution increases smart contract complexity, potential for bugs or exploits in fee allocation logic.

Mitigation:

• Comprehensive testing of fee distribution

• Security audits specifically reviewing fee logic

• Formal verification of fee math

• Multiple independent code reviews

Residual Risk:

Smart contract bugs could lead to incorrect fee distribution, requiring emergency patches or treasury compensation.