10.6 Financial Risks

Token Price Volatility

Risk:

PATH token price may be highly volatile:

• Crypto market correlation

• Speculative trading

• Low initial liquidity

• Whale manipulation

Impact on Protocol:

• Platform registration becomes more/less expensive

• Staking rewards value fluctuates

• Oracle incentives weaken if PATH drops significantly

Mitigation:

• Deep liquidity pools (100M PATH allocation)

• Utility-focused tokenomics (not purely speculative)

• Vesting schedules prevent dumps

• Buyback mechanisms from treasury (future consideration)

Residual Risk:

TOKEN price could fall 80-90% in bear markets, reducing protocol security and participation.

Liquidity Risk

Risk:

Insufficient PATH liquidity on DEXes could lead to:

• High slippage for users

• Difficulty for platforms to acquire stake

• Poor price discovery

• Limited accessibility

Mitigation:

• $100M PATH allocated for liquidity provision

• Partnerships with market makers

• Multiple DEX listings (Jupiter, Orca, Raydium)

• Liquidity mining incentives

Residual Risk:

In extreme market conditions, liquidity could dry up, hampering ecosystem growth.