Protocol Disclosures

Gondi is an open lending, borrowing, and decentralized finance protocol (“Protocol”) built on Ethereum.

The Protocol allows Gondi users to lend and borrow certain crypto assets, including non-fungible tokens. The Protocol does not guarantee any profitability by borrowing or lending any crypto assets as applicable. Your use of the Protocol is entirely at your own risk.

The Protocol is available on an “as is” basis without warranties of any kind, either express or implied, including, but not limited to, warranties of merchantability, title, fitness for a particular purpose and non-infringement.

Terminology. When used in the context of describing the Protocol, the terms “debt,” “lend,” “refinance, “collateral”, “credit,” “leverage,” “bank”, “borrow”, “yield”, “invest” and/or other similar terms are not meant to be interpreted pursuant to the customary legal meaning of those terms or to those terms as defined in any body of commercial law. Rather, such terms are being used to draw rough analogies between the heavily automated and mostly deterministic operations of a decentralized-finance ("DeFi”) smart contract system and the discretionary performance of traditional-finance transactions between individuals (“TradFi”).

For example, “debt” ordinarily means a legally enforceable promise from a debtor to a creditor to pay an interest rate and eventually repay the principal. Therefore, “debt” cannot exist without legal agreements and cannot be enforced without courts of law. By contrast, with the Protocol, there are no legal agreements, promises of payment or courts of law, and therefore there are no debts, loans or other traditional finance transactions involved.

Instead, the Protocol consists of software (including embedded game-theoretic incentives and assumptions) through which parties can share their digital assets with other parties or smart contract systems and, under normal and expected conditions, including economic and other assumptions regarding market and market participant behaviors, are expected to get their digital assets returned, plus extra digital assets, most of the time or in most cases.

Unlike in traditional lending, the “lender’s” financial return does not depend primarily on the creditworthiness, solvency or financial skill of the “borrower” or on legal mechanisms such as the perfection of liens or the priority of creditor claims in a bankruptcy - it depends primarily on the incentive model assumed by the software design and how reliably the software implements that model. Unlike a debtor, people who “borrow” digital assets from the Protocol smart contract system are not required to and have not promised to pay the digital assets back; if the “borrowers” never pay the digital assets back, no promise has been broken, no legal agreement has been breached and the digital asset “lenders” cannot sue the “borrowers” to get their digital assets back. Instead, by not repaying the borrowed digital assets, the digital asset “borrowers” merely demonstrate either that they lacked sufficient incentive to want to do so -- for example, because their smart-contract-bound “collateral” was worth much less than the “borrowed” digital assets -- or that a technical issue -- such as congestion of the settlement network (e.g., Ethereum) -- prevented them from doing so. Regardless, the “borrowers” do not have a legal obligation to repay digital assets when they do not want to or cannot do so, and there is no legal remedy for damaged “lenders” when insufficient incentives or technical problems result in a digital asset shortfall.

Rate. The stated APR or APY for a given digital asset or pool (the “Rate”) is [denominated in terms of a specific relevant digital asset, not in terms of U.S. Dollars or other fiat currencies]. Each Rate is a forward-looking projection based on a good faith belief of how to reasonably project results over the relevant period, but such belief is subject to numerous assumptions, risks and uncertainties (including smart contract security risks and third-party actions) which could result in a materially different (lower or higher) digital asset-denominated APR or APY. Rates are not offers, promises, agreements, guarantees or undertakings on the part of any person or group of persons, but depend primarily on the results of operation of smart contracts and other autonomous or semi-autonomous systems (including third-party systems) and how third parties interact with those systems after the time of your deposit. [Even if a particular projected Rate is achieved, you may still suffer a financial loss in fiat-denominated terms if the fiat-denominated value of the relevant digital assets (your deposit and any digital assets allocated or distributed to you pursuant to the Rate) declines during the deposit period. APRs and APYs are not interest rates being paid on a debt.]

DeFi Risk. Thus, the transactions you can effect through the Protocol and its decentralized finance systems, while superficially similar to traditional financial transactions in some ways, are in fact very different. DeFi and TradFi each have unique costs and benefits, risks and protection mechanisms. Please bear this fact in mind when interacting with the Protocol, and do not use the Protocol without a sufficient understanding of their unique risks and how they differ from traditional financial transactions. The only way to fully understand such risks is to have a strong understanding of the relevant technical systems and the incentive design mechanisms they embody—it is strongly encouraged that you to review the Protocol’s technical documentation and code [2] before use.

Assumption of Risk. You assume all risks associated with using or interacting with the Protocol, and digital assets and decentralized systems generally, including but not limited to, that: (a) digital assets are highly volatile; (b) using digital assets is inherently risky due to both features of such assets and the potential unauthorized acts of third parties; (c) you may not have ready access to digital assets; and (d) you may lose some or all of your tokens or other digital assets. You agree that you will have no recourse against anyone else for any losses due to the use of or interaction with the Protocol. For example, these losses may arise from or relate to: (i) incorrect information; (ii) software or network failures; (iii) corrupted digital wallet files; (iv) unauthorized access; (v) errors, mistakes, or inaccuracies; or (vi) third-party activities.