Risk & Security

Please be aware that the use of KLAYswap has the following risk factors.

• KLAYswap is a blockchain decentralized protocol without a central entity. Users participate in transactions through liquidity pools on the blockchain created by other users at their own responsibility and judgment. This may lead to users being unable to receive recovery support from someone or KLAYswap for the results of an user's mistake, so it is always recommended to test with a small amount first to manage the risk caused by mistakes(mistransfers, etc.).

• All assets and asset liquidity pools identified on the Klayswap website are tokens on the Klaytn chain that are self-registered by users without going through individual screening, and their safety is not guaranteed by the Klayswap team.

• Due to the nature of the AMM (Automated Market Maker) method, when a user exchanges an asset on the KLAYswap, the asset price applied to the user at that point may fluctuate significantly depending on the swap size, the amount(ratio) of assets currently waiting in the pool, and real-time deposits and withdrawals of the pool.

• Asset price fluctuations may cause assets to be deposited or withdrawn from the pool at prices or ratios that users did not expect. Also, if there is a price change from the price at the time of depositing in the pool, you may incur a loss when withdrawing, compared to the case that you simply hold the asset.

• All Figures displayed on the website are estimated information provided to help users make decisions, and do not guarantee the timeliness, suitability or accuracy of the data.

• A normal KLAYswap website never asks for the user's personal wallet private key, mnemonic key, and seed phrase to be entered.

• For other risk factors, precautions, and conditions of use, please check below.

1. Abstract

KLAYswap is a decentralized application (DApp) based on Klaytn Chain which is developed by a third party. KLAYswap is designed to provide users with an easy-to-use interface such as KLAYswap website(https://klayswap.com)(Hereinafter KLAYswap and KLAYswap website are collectively referred to as the “KLAYswap”) to the decentralized protocol that integrates directly with Klaytn blockchain wallet of a user, to swap various digital assets and to provide liquidity.

NOTICE: This guideline contains the terms and conditions by which you may access and use the KLAYswap. Please read this guideline carefully. By accessing or using the KLAYswap after you check this guideline, you signify that you have read, understand, and agree to be bound by the terms and conditions in its entirety.

2. Revision terms of this document

The contents of this document can be revised at any time for the purposesreasons such as change, addition, deletion, supplementation, user protection, and error correction of KLAYswap. If the content of this document is revised, the revision will take effect from the time the changed contents is posted. However, if the content to be changed is unfavorable to the user or is a significant change, it will be posted 30 days before the effective date. If the user checks the revised document after the effective date and continues to use KLAYswap, it is deemed that such user has read, understood and agreed to the revision.

3. Eligibility

• To use KLAYswap, an user must be at least the age of majority in civil terms in his/her country (ex: 21 years of age in Singapore). Also, a user must be able to make a statement that you have full rights and authority to enter into and comply with civil agreements on behalf of yourself or any legal entity that you represent.

• An user must be able to make a statement that a user is (i) not subject to any economic or trade sanctions by any governmental authority (including, but not limited to, the Office of Foreign Assets Control of the U.S. Department of the Treasury, etc.); (ii) is not citizens or residents of any jurisdiction subject to comprehensive economic sanctions by the United state, and will not use KLAYswaps for the purpose of illegal activity conduction, promotion, or designing.

4. Precautions when using KLAYswap

4.1. General Precautions

For reliable network/service while using KLAYswap, please read the following guideline carefully.

• It is recommended that you access the service with only one instance/tab.

• The service may be limited if you use multiple instances/tabs for prolonged period of time, using a public/shared IP access point and/or there is an excessive amount of connection requests.

• If you are having difficulty with connectivity for whatever reason, please close all instances/tabs and access the service after at least 1 hour before re-connecting.[O1]

4.2. Precautions regarding Asset deposit/withdrawal

4.2.1. Asset deposit/withdrawal

Users should be aware of the following in depositing and withdrawing assets.

• To request a transaction, the user must have a Klaytn wallet to hold Klaytn-based assets, along with a minimum amount of Klaytn (KLAY) to use for transaction fees

• As such, an asset that is not a Klaytn-compatible Token (KCT) and based on other blockchains, including but not limited to Ethereum, Ripple, BSC, must be converted into a Klaytn-compatible format (k-asset) through bridging protocol(e.g., Oribit Bridge) prior to being deposited into KLAYswap.

Deposit Guide for each token (Link)

4.2.2. Asset mistransfer

Users must accurately check the asset type and address when depositing and withdrawing assets from or to KLAYswap. If a user deposits a type of asset that is not supported by Klaytn Chain, or if the required deposit address is not entered or entered incorrectly, such deposit may not be properly processed and assets may be irreversibly lost.

Please refer to the link below for more information regarding mistransfer of assets.

• Even for some assets (e.g., Ripple, XRP) that are heterogeneous chain’s assets from Klaytn, which can be deposited and withdrawn from the wallet directly through the KLAYswap interface without going through the bridge site, the user must accurately enter the deposit address and destination tag assigned to each wallet. If the deposit address or destination tag is not entered or entered incorrectly, such deposit may not be properly processed and assets may be irreversibly lost.

• KLAYswap is a decentralized application in which the private key of user assets is not managed by a central entity. KLAYswap has such structure in which asset recovery or/and technical support from a central entity are impossible for the consequences from users' mistake or negligence including but not limited to wrong deposits described above. This structure is designed so that if a user deposits an asset incorrectly, no one, including KLAYswap, can access the asset. Due to the decentralized nature like this, capabilities and responsibilities of KLAYswap team for the incorrect deposit or mistransfer may not be similar to the support of many centralized exchanges(e.g., Upbit, Bithumb, Coinone, ect.) for technical and structural reasons

• To prevent losing assets, we recommend that users test with a small amount of assets prior to sending a larger amount.

* For deposit and withdrawal problems occurring as a result of using Orbit Bridge, please refer to the respective site’s policies.

Orbit Bridge (Link)

4.3. Providing Liquidity(Deposit), Removing Liquidity(Withdraw), Swap

You can act as a Liquidity Provider by providing liquidity to a Liquidity Pool(e.g., Single, existing pair, and plus pair) in KLAYswap; however, you must carefully evaluate and consider the risk before proceeding with the transaction, and take responsibility for your own actions and judgments.

4.3.1. Price

KLAYswap works based on the AMM(Automated Market Maker) method. Price of each token within KLAYswap is determined by the liquidity pool ratio of tokens within the relevant Smart Contract. As automated Smart Contract makes adjustment to price as per the formula (x*y=k), the price shown on KLAYswap interface may not be the same as prices shown at other exchanges, and cannot be guaranteed for accurate or appropriate market prices.

[Article] How AMM predicts prices

Please refer to the link below for more information regarding price

• Each token price at the time a user deposits, withdraws, or swaps assets is determined by the above price measurement method (exchange ratio of token pairs), and the price is not directly proportional to the exchange quantity.

• In addition, as the exchange rate of token pairs momentarily changes due to the real-time participation of various participants, the price displayed on the KLAYswap website right before the transaction may change at the time of the transaction, and the price applied at the time of the actual transaction may vary. (e.g., Transactions occur in token pairs, asset deposits and withdrawals in token pairs, etc.)

• The KLAYswap Protocol has a stabilization measure so that the request can be executed only within a certain range of the exchange rate to be applied by the user in order to minimize the loss that may occur due to the large change in the current exchange rate, but you should precisely check and confirm the exchange rate applied to the time of transactions when proceeding liquidity deposits, withdrawals and swaps.

4.3.2. Estimation of expected yield and Utilization cost

All rates of returns displayed on the KLAYswap interface, including returns from deposit, KSP distribution, airdrop, transaction fee, and staking, and the "Utilization cost" paid by a plus depositor in return for utilizing a single pool asset are based on annual estimates of distributed rewards and do NOT guarantee fixed rates.

For more details regarding rates of returns displayed, Please refer to below link

In particular, at 9 a.m. (KST) every day, the KSP distribution yield of each liquidity pool gets updated reflecting the KSP Mining rate aggregated from the user pool vote and the KSP buyback quantity per pool. At this time, the figure that indicates KSP distribution yield includes the quantity allocated to the vKSP Holder(5%), development team (5%), Treasury(5%), Partner(5%) and the rewards that users actually receive is the amount that the quantity allocated for the team is excluded.

KLAYswap strives to provide accurate information in real time as much as possible, but the expected rate of return displayed in the screen may vary from the actual rate of return due to price fluctuations of distributed tokens, changes in liquidity pool size, and delays in transaction processes.

4.4. Provision of each deposit pool

4.4.1. provision of single pool liquidity

Users can deposit their assets in a single pool through the KLAYswap to earn KSP distribution and returns for deposit. Assets deposited by a single pool depositor are utilized by a plus depositors who are willing to utilize more assets than they already possess, and the cost (interest) paid by the plus depositor in return for utilizing a single pool asset is distributed to single pool depositors. (80% of the expenses paid by the plus depositors are distributed to single depositors)

Withdrawal of assets deposited in a single pool may be temporarily delayed. For more details, please refer to the link below

If the utilization of a single pool asset is excessively active in this process, withdrawal of assets deposited in a single pool may be temporarily delayed. However, automated smart contracts adjust deposit returns and borrow costs according to the interaction between the demand for single pool asset borrowings and the supply of a single pool asset. This naturally results in the supply of additional assets and return of borrowed assets from a single pool, and the withdrawal of deposited assets gets properly processed.

4.4.2. Provision of existing pair

Users can earn returns from KSP distribution, transaction fee distribution, and token airdrop by depositing their assets in existing pair deposit service through the KLAYswap .

When depositing assets in pair depositing, ‘Impermanent Loss’ can occur. You can find out more details in the link below.

Should the price of assets change drastically due to market fluctuations, the expected value of the user assets in the pool may be different from or lower than in the case that you simply held such assets, even to a point of a loss. However, these losses are finalized upon withdrawal from the pool, and for this reason these losses are called “Impermanent Loss’ - of which you can find out more details in the link below. If the price difference between the two assets become closer to what they were at the time of depositing into the pool before you finalize such loss with withdrawal of such assets from the pool, the actual loss would minimize. Also, total profit must be considered with KSP mining rate and transaction fee reward as well.

[Article] What is Impermanent Loss? (Link)

4.4.3. Provision of liquidity for plus deposit

Users can earn returns from KSP distribution, transaction fee distribution, and token airdrop by depositing their assets in the plus pair through the KLAYswap. When depositing assets in a plus pair, plus depositors are able to deposit additional asset(hereinafter, referred to as the “additional asset” in this section) utilized from a single deposit pool in addition to the asset already in their possession(hereinafter, referred to as the ”basic asset” in this section) to the pair, and given the distribution reward according to that.

However, if there is a significant disparity between the price at the time of deposit and the current market price, the expected yield may be lower than in the case that you simply held such assets, and estimated loss can occur at that point of valuation.(This is the same logic as in the existing pair applies to plus pair)

If the price of assets deposited in the plus pool changes dramatically and asset utilization rate (ratio of additional asset to total assets deposited) exceeds the predetermined percentage(85%), the total assets deposited by the user may be automatically returned (with auto-return fee). Plus Deposit has its own merit and high-risk, so please read the Plus Deposit Guide below carefully before using Plus Deposit.

Plus Deposit Guide (Link)

When depositing assets in a plus pair, plus depositors are able to deposit additional asset(hereinafter, referred to as the ”additional assets” in this section) utilized from a single deposit pool in addition to the asset already in their possession(hereinafter, referred to as the ”basic asset” in this section) to the pair, and given the distribution reward according to that. The amount of additional assets when depositing is calculated based on the United States dollar(USD) value of the underlying asset (basic asset) of plus depositors. (Price Oracle price standards)

Plus depositors utilize the corresponding amount of additional asset calculated as above from a single pool, and the cost(interest) accumulates according to the real time utilization cost. At the point of closure in Plus Deposit, plus depositors should return all of the additional asset utilized and pay for the cost of utilization (interest) mentioned above.

A certain percentage of assets is automatically swapped (exchanged) according to the users’ basic asset, additional asset (form of pair), and utilized asset, and deposited in pairs, resulting in transaction fees per pool based on the terms and conditions of swap, and these fees are excluded in the pair when depositing. In the process, the larger the scale of transaction, the difference between the current exchange ratio (price) of pools and the price applied when swapping may occur, resulting in a disparity in the scale of priorly estimated additional asset. Therefore, you must carefully evaluate and consider the risk before proceeding with the transaction, and take responsibility for your own actions and judgments.

In case of plus deposit withdrawal, the withdrawn assets are firstly used to return for additional asset being utilized. If you have returned all the additional asset you are utilizing, you can withdraw the remaining assets and receive them in your wallet. Upon the process of return, swap(exchange) may occur automatically, and the return will proceed after transaction fees according to the terms and conditions of swap are excluded. In the process, the larger the scale of transaction, the difference between the current exchange ratio (price) of pools and the price applied when swapping may occur (Price impact), resulting in the disparity in actual amount of return. Therefore, you must carefully evaluate and consider the risk before proceeding with the transaction, and take responsibility for your own actions and judgments.

In case of Plus deposit, automatic returns may proceed for the safe return of additional assets utilized by plus depositors to a single pool. If the asset utilization rate (ratio of additional asset utilized to total asset deposited) exceeds the predetermined percentage(85%), the protocol automatically returns the additional asset being utilized in a prior manner, and users can directly receive the rest of assets in their wallets after paying for auto-return fee (20%). In the event of a volatile change in token prices, all of your asset deposited may be used to return for the additional asset utilized. To prevent automatic return, you are recommended to deposit additional asset with a low plus multiplier, or withdraw the amount of assets equivalent to the plus assets on the withdrawal tap.

4.4 Detailed precautions by type of deposit

4.4.4 Position Deposit

The user can earn KSP distribution revenue, deposit revenue, and profit from price gains by position deposit in KLAYswap.

For deposit position, a user can temporarily utilize other users' assets deposited in a single pool(hereinafter referred to as "Utilized Assets" in this section) at a certain cost (hereinafter referred to as "Utilization Cost" in this section), within the maximum range determined by the value of the US dollar equivalent of the assets deposited fundamentally by the user(hereinafter referred to as "Basic Assets" in this section).

The formula for calculating the maximum range of the Utilized Assets is subject to change and please refer to the link in the deposit position guide below.

The user may purchase or sell particular tokens (hereinafter referred to as the "Target Assets" in this section) to take a position in which the user seeks profit according to the conditions of the appreciation of the value of the Target Assets(so-called “long-position”) or to take a position in which the user seeks profit according to the depreciation of the value of the Target Assets(so-called “short-position”).

The Basic Assets of the user and the assets purchased or sold while the user takes a position (In the case of a purchase, the Target Assets is held, and in the case of a sale, certain Stable Asset is held. These held assets are hereinafter referred to as "Secured Assets" in this section) are deposited in a single pool under the terms and conditions of the single pool deposit (refer to the section of single pools).

In principle, the user may close the deposit position at any time desired by the user, except in special cases (including but not limited to the case of automatic return) notified in this section and/or other terms and conditions of deposit position.

At the time of the close of the deposit position, the Secured Assets is used to return the entire Utilized Assets (including the Utilization Cost of the Utilized Assets), and the remaining assets after the return of the Utilized Assets can be withdrawn and received by the user in the wallet.

For position deposit, the user should be aware of the risk of the decline in expected returns or losing assets, which is including but not limited to:

(1) In the case of the market price of the Target Assets significantly is rising or falling from the price at the time of deposit position, the expected return may be lower than the case in which the user simply held the Target Assets, even may lead to valuation loss or firm loss.

(2) If the ratio of "The value of Utilized Assets (including Utilization Cost)" to "The value of total deposit assets [which is the sum of the Basic Assets and Secured Assets(plus single pool deposit revenue)]"(This ratio is hereinafter referred to as the “The Utilization Ratio” in this section) exceeds the threshold due to some reasons such as changes in value during deposit position, such total deposit assets of the user may be automatically released from the deposit and used for the return of the Utilized Assets with certain automatic return fee in accordance with the predetermined terms and conditions of position deposit. When such automatic return happens, the evaluated profit or the loss of the user at the time is fixed and realized regardless of the user’s will, and it may result in a great or total loss. Please refer to the position deposit guide link below for the automatic return reference formula and reference value.

(3) Swap (trading) occurs in the pool in the process of deposit position, close position, and automatic return. At this time, transaction fees are incurred in accordance with the transaction fee rate by each pool according to the conditions at the time of swap (transaction), and the user bears these transaction fees. In this process, the larger the trading size, the greater the price impact between the current pool exchange rate (price) and the actual price applied when swapping.

(4) When a user utilizes other user's Utilized Assets deposited in a single pool, the user's Utilization Cost accumulate in real time, depending on the terms and conditions for the Utilization Cost of the pool, and these accumulated Utilization Cost must be returned with the Utilized Assets at the end of the position.

(5) Users should consider all the risk of decline in expected returns or loss of assets based on the characteristics of the blockchains, virtual assets, and KLAYswap disclosed herein, etc

Position Deposit is not recommended for users with less experience in investing in virtual assets or fund users who are unable to afford the possibility of losses, as it is a function of high structural complexity and high risk of asset loss.

Prior to using the Position Deposit, users should understand all the risks and information for the Position Deposit above and read the Position Deposit Guide below carefully.

Position Deposit Guide (Link)

For deposit position, a user can temporarily utilize other users' assets deposited in a single pool(hereinafter referred to as "Utilized Assets") at a certain cost (hereinafter referred to as "Utilization Cost"), within the maximum range determined by the value of the US dollar equivalent of the assets deposited by the user(hereinafter referred to as "Basic Assets").

The user may purchase or sell particular tokens (hereinafter referred to as the "Target Assets") to take a position in which the user seeks profit according to the conditions of the appreciation of the value of the Target Assets(so-called “long-position”) or to take a position in which the user seeks profit according to the depreciation of the value of the Target Assets(so-called “short-position”).

The Basic Assets of the user and the assets purchased or sold while the user takes a position (In the case of a purchase, the Target Assets is held, and in the case of a sale, certain stable asset is held. These held assets are hereinafter referred to as "Secured Assets") are deposited in a single pool under the terms and conditions of the single pool deposit.

Long-position deposit users buy and acquire the Target Assets by using the Utilized Assets in a single pool of Stable Assets, and short-position deposit users acquire the Stable Assets by selling Target Assets by using the Utilized Assets in a single pool of the Target Assets. Long-position takers acquire the Target Assets as the Secured Assets, whereas short-position takers acquire Stable Assets as the Secured Assets taken by selling the Target Assets.

The price merge can be achieved by closing the position at the time when the user wants. In principle, the user may close the deposit position at any time desired by the user, except in several cases (including but not limited to the case of automatic return) notified in the User's Guide and other terms and conditions of deposit position.

[Risk of loss or falling of expected earnings]

For position deposit, the user should be aware of the risk of the decline in expected returns or losing assets, which is including but not limited to:

(2) If the ratio of "The value of Utilized Assets (including Utilization Cost)" to "The value of total deposit assets [which is the sum of the Basic Assets and Secured Assets(plus single pool deposit revenue)]"(This ratio is hereinafter referred to as the “The Ratio” in this section) exceeds the threshold due to some reasons such as changes in value during deposit position, such total deposit assets of the user may be automatically released from the deposit and used for the return of the Utilized Assets with certain automatic return fee in accordance with the predetermined terms and conditions of position deposit. When such automatic return happens, the evaluated profit or the loss of the user at the time is fixed and realized regardless of the user’s will, and it may result in a great or total loss. Please refer to the position deposit guide link below for the automatic return reference formula and reference value.

(5) Users should consider all the risk of decline in expected returns or loss of assets based on the characteristics of the blockchains, virtual assets, and KLAYswap disclosed herein, etc

[Detailed description of automatic return]

To avoid the risk of users failing to return temporarily Utilized Assets due to the reasons such as fluctuations in the market price of assets during position deposit, automatic returns may proceed immediately without user’s consent, confirmation or notification to users.

In this case, not only the portion that corresponds to the Utilized Assets is returned, but the user's total deposited assets may be released and used for the return.

In other words, the condition for the automatic return is satisfied if "The value of Utilized Assets (including Utilization Cost)" to "The value of total deposit assets [which is the sum of the Basic Assets and Secured Assets(plus single pool deposit revenue)]"(This ratio is hereinafter referred to as the “The Utilization Ratio”) in real time during position deposit exceeds the threshold value(90%).

If the condition for automatic return is met, the Utilized Assets (including Utilization Cost) is automatically returned first from the total deposited assets, and then the assets after the automatic return fee (20%) are excluded from the remaining assets can be received directly to the user's wallet.

However, due to some reasons such as rapid changes in the market price of assets, it is possible that all (100%) of the assets deposited by the user is returned (or lost) in the course of the automatic return, leaving no assets available to the user.

To avoid automatic return, you should either deposit additional Basic Assets in advance so that the Utilization Ratio does not exceed the threshold (90%), or lower the size of the Utilized Assets by closing a certain portion of the position on the Close tab.

[Trading fee and price impact in position deposit]

Throughout the process from deposit position to close position, user’s Utilized Assets will be automatically swapped (traded) from a pool with transaction fees according to the terms for the fees of such pool and this transaction fee will be paid by the user’s assets.

In this process, the larger the trading size, the greater the price impact between the current pool exchange rate (price) and the actual price applied when swapping.

[Formula for Position Deposit]

Largest amount of Utilized Assets

[ ]

Automatic Return Standard Calculation

The Utilization Ratio of the user = The value of Utilized Assets (including Utilization Cost) / "The value of total deposit assets [which is the sum of the Basic Assets and Secured Assets(plus single pool deposit revenue)

The Utilization Ratio of the user > 0.90

• Basic Assets: Assets deposited fundamentally by the user for Position Deposit

• Utilized Assets: Assets which is temporarily utilized in other users' assets in a single pool at a certain cost

• Secured Assets: Assets held by users by taking a position to buy or sell specific tokens(i.e. Target Assets). ( In the case of a buy, the Target Assets is held, and in the case of a sale, certain Stable Asset is held.)

The Automatic Return Fee

20% of remaining assets after returning the Utilized Assets

Utilization Cost for the Utilized Assets

changes in real time (vary by pools)

Position Deposit has high structural complexity and is at high risk of asset loss. It is not recommended for beginners with less experience in investing in cryptocurrency or users who cannot afford the possibility of loss.

Users should carefully review the contents of this deposit position guide, carefully evaluate and consider the risks of deposit position, and proceed with the transaction with taking responsibility for the users’ own actions and judgment.

Price Oracle

Price Oracle is the external price reference used by KLAYswap. Pricing standards related to the execution of plus deposits, position deposit, withdrawals and automatic returns are measured through Price Oracle. Price Oracle prices may differ from the pool exchange rate (price) on the KLAYswap.

• Stable coins(e.g., USDT, USDC, DAI, etc.) are calculated as fixed values (USD1.0). Provided, appropriate measures may be taken if there is a material issue with the stability of the stable coin or if there is an equivalent reason.

• Value for other coins, considering scale of liquidity of each asset, is reasonably determined based on pool exchange ratio (price) in KLAYswap, the median value of TWAP, and the price of certain centralized exchanges such as Binance, Upbit, Bithumb, Coinone, Huobi, and gate io.

4.5. KSP Staking

• KSP staking is neither an act of custody nor entrusting KSP to another entity. It is to lock up users' KSP asset by signing of users so that the KSP is not remitted or traded according to the consented terms agreed by the user themselves (e.g., staking period, etc.). Therefore, it is impossible to cancel, withdraw, or change the withdrawal wallet that violates these terms.

• In the case of staking with 8x efficiency, the staking continues without a fixed unstacking period. In the case of 4x or less staking efficiency, the unstaking information will be guided by pop-up for 30 days before the end of the staking contract. During these 30 days, you can either extend the staking period or withdraw the staked assets.

• If unstaking is not conducted within the 30 day waiting period, the new staking contract will automatically proceed based on the longest period of the previous contract (4/8/12 months) and the automatically re-contracted staking cannot be canceled.

• Once a staking contract is executed, it is not possible to cancel, withdraw, or change the withdrawal wallet, before the end of the contractual staking period. Therefore, please carefully review the staking policy below and the guide on termination of the contract before making a staking decision.

KLAYswap staking policy and the guide on termination of the contract (Link)

4.6. Provision KLAYswap pool voting

Those who hold voting rights (vKSP) by staking KSP tokens can participate in the KLAYswap pool voting according to the KLAYswap pool voting policy.

Please refer to the link below for the KLAYswap pool voting policy.

KLAYswap Pool Voting Policy (Link)

4.7. Provision of KLAYswap Governance Voting

Those who hold voting rights (vKSP) by staking KSP tokens can participate in the KLAYswap governance voting according to the KLAYswap governance voting policy.

Please refer to the link below for the KLAYswap governance voting policy.

KLAYswap Governance Voting Policy (Link)

5. Additional Notes on KlaySwap V3

5.1. Concentrated Liquidity

KLAYswap V3 (Version 3) has a Concentrated Liquidity function. This notice refers to the liquidity pool with centralized liquidity as the 'V3 pool' and to the liquidity pool with the previous features as the 'V2 pool'. Due to its principle of operation, the V3 pool provides users with more freedom and choice for centralizing liquidity supply and designating a supply section and, therefore, may hold higher profit expectations and greater loss risks than the V2 pool. The V3 pool deposit risks compared to the V2 pool deposit are as follows. The narrower the designated price range becomes, the higher the chance of (i) a rise in the risk of impermanent loss (IL; Impermanent Loss), (ii) a rise in the risk of changing the composition ratio and value of deposited assets (There is also the possibility that the ratio of the two assets is fixed at 100:0 at the time of withdrawal), (iii) a rise in the likelihood of not being able to obtain deposit rewards when the token's price departs from the user's specified range, (iv) a rise in the risk of loss due to price range migration (V3 to V3 migration) when the price is out of the price range. For more information, please refer to the link below.

Concentrated liquidity introduction, background and precautions (Link) V2 to V3 Migration Guide (Link) V2 to V3 Migration Details Policy (Link) V3 Pair Deposit Guide (Link) V3 Pair Deposit Guide Details Policy (Link) V3 to V3 Migration Guide (Link) V3 to V3 Migration Details Policy (Link) V3 Pool Withdraw Guide (Link) V3 Pool Withdraw Guide Details Policy (Link)

As the V3 pool deposit has high structural complexity and is difficult to predict the risk of asset loss (particularly when the deposit has a narrow price range), it is not recommended for users with little experience in investing in virtual assets and the personality that cannot handle the possibility of loss. Users must carefully evaluate and consider the risks of concentrated liquidity before supplying and managing liquidity to liquidity pools.

5.2. V2 to V3 Migration

Users can use the V2 to V3 Migration feature to move liquidity from a V2 pool to a V3 pool. However, when V2 to V3 migration is executed, (i) since the deposit occurs in the V2 pool, the pool's current imperative loss is confirmed, and (ii) swapping between assets may result in transaction fees and slippage losses when entering the price range selected by the user in the V3 pool. For more information, please refer to the link below.

V2 to V3 Migration Precautions (Link)

6. Prohibited Acts

Users must comply with this guide's precautions and not engage in the following actions.

• Activities that harm or disrupt the sound trading order of KLAYswap

• Activities that disrupt or negatively affect the operation of KLAYswap (including but not limited to KLAYswap interfaces, KLAYswap protocols, etc.) through automated or other fraudulent methods such as Agents, scripts, spiders, spyware, toolbars, etc.

• Activities that defame the KLAYswap team or interfere with their work

• Providing inaccurate, incorrect, or misleading information while using KLAYswap

• Activities of taking the assets of KLAYswap users or engaging in taking the authority of the user's wallet without justifiable cause

• Activities that use proceeds directly or indirectly related to all forms of criminal activity (e.g., terrorism activity, tax evasion, etc.) when using KLAYswap

• Impersonating someone other than yourself during the communication with KLAYswap support team

• Other illegal acts in violation of any applicable laws and regulations

7. NO WARRANTIES AND LIMITATION OF LIABILITY

• KLAYswap is a web-app interface that allows users to use their Klaytn blockchain wallet to communicate with a decentralized protocol to swap assets and to provide liquidity. This means KLAYswap wields no control over individual Liquidity Pools, or the trust of a swap. It is the user’s responsibility to carefully consider the benefits and risks related, by taking into consideration token price ratio at the moment of swap, and all the necessary informations to evaluate such risks.

• Expected return rate, token price and all other information provided by KLAYswap interface serve to help users make informed decisions for providing liquidity, removing liquidity, swapping, and should not be used to make financial decisions. KLAYswap makes reasonable effort to provide accurate information, but does not guarantee the timeliness or accuracy of the information.

• KLAYswap is not responsible for user loss of assets, and for generating profit that is less than projected profit, resulting from the use of KLAYswap.

• KLAYswap does not guarantee the continuity of KLAYswap service, and of the functions within. Any service or functions provided within KLAYswap can be added or deleted permanently, and KLAYswap itself may be stopped or changed. (In the case of a permanent stoppage of KLAYswap service, users that may be affected will be given a reasonable period (30days or more) and notifications/guide.)

• KLAYswap does not guarantee the reliability of Klaytn blockchain platform used by KLAYswap Protocol, as well as any other third party services.

• Developers, operators and governance participants of KLAYswap do not endorse, guarantee, or assume responsibility in any way for any and all part of KLAYswap to the fullest extent permitted by law.

• Due to the complexity of software code and the nature of technology, the perfect integrity of the code cannot be guaranteed. Smart Contract codes used in KLAYswap may be susceptible to vulnerabilities which cannot be prevented by due diligence in the industry, and risks of asset loss exist(e.g., hackings or flash loan exploits utilizing those vulnerabilities).

• There is a continuous effort to maintain the block sync between KLAYswap and Klaytn network; however, KLAYswap interface may be stopped without prior notice due to problems in the network resulting from transaction congestion, computer system errors and software attacks and other factors, such as natural events. KLAYswap is not guaranteed to work at all times.

• In aforementioned situations and more, there may be errors in the values/information displayed on the interface, as well as stoppage of service connection. User requests for swap, deposit, withdrawal and other transactions may be delayed or fail.

• KLAYSWAP, OUR DEVELOPERS, EMPLOYEES, OFFICERS, OPERATORS, AFFILIATES, AND GOVERNANCE PARTICIPANTS(HEREINAFTER, REFERRED TO AS THE “WE” OR “US” IN THIS AND NEXT SUBSECTIONS), MAKE NO WARRANTIES, EXPRESS OR IMPLIED, GUARANTEES OR CONDITIONS WITH RESPECT TO YOUR USE OF KLAYSWAP. YOU UNDERSTAND THAT USE OF KLAYSWAP IS AT YOUR OWN RISK AND THAT WE PROVIDE KLAYSWAP ON AN "AS IS" BASIS AND "AS AVAILABLE." YOU BEAR THE ENTIRE RISK OF USING KLAYSWAP. YOU ACKNOWLEDGE THAT COMPUTER, SOFTWARE, TELECOMMUNICATIONS SYSTEMS, AND BLOCKCHAIN SYSTEM ARE NOT FAULT-FREE.

• YOU UNDERSTAND AND AGREE THAT WE SHALL NOT BE LIABLE TO YOU FOR: ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL CONSEQUENTIAL OR EXEMPLARY DAMAGES WHICH MAY BE INCURRED BY YOU, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY.. THIS SHALL INCLUDE, BUT NOT BE LIMITED TO, ANY LOSS OF PROFIT (WHETHER INCURRED DIRECTLY OR INDIRECTLY), ANY LOSS OF GOODWILL OR BUSINESS REPUTATION, ANY LOSS OF DATA SUFFERED, COST OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, OR OTHER INTANGIBLE LOSS. UNDER NO CIRCUMSTANCES SHALL WE BE LIABLE TO YOU FOR ANY CLAIMS, PROCEEDINGS, LIABILITIES, OBLIGATIONS, DAMAGES, LOSSES, OR COSTS IN THE AMOUNT EXCEEDING THE ABOUNT YOU PAID US IN EXCHANGE FOR ACCESS TO AND USE KLAYSWAP, OR USD$100.00, WHICHEVER IS GREATER. THIS LIMITATION OF LIABILITY SHALL APPLY TO THE FULLEST EXTENT PERMITTED BY LAW.

8. Protection of rights and cooperation with law enforcement agencies

In the following cases, the measures to user's access information (e.g., wallet address, access information, etc.) to the KLAYswap website may be taken as reasonably necessary, such as being provided to a regulatory authority or judicial authority.

• When there are reasonable grounds to believe that the relevant asset is involved in hacking, money laundering, or other criminal activity

• When requested by a regulatory or judicial authority based on the applicable laws and regulations

9. Dispute

Any dispute arising out of or in connection with these terms including any question regarding its existence, validity or termination and any dispute arising out of or in connection with users’ access or use of KLAYswap, shall be referred to and finally resolved by arbitration administered by the Singapore International Arbitration Centre (“SIAC”) in accordance with the Arbitration Rules of the Singapore International Arbitration Centre ("SIAC Rules") for the time being in force, which rules are deemed to be incorporated by reference in this clause. The seat of the arbitration shall be Seoul or Singapore. The Tribunal shall consist of one arbitrator. The language of the arbitration shall be English.

10. Safety and Security

KLAYswap team has received professional security audits on KLAYswap from credible professionals in the industry, and is in its continuous effort to improve security and to minimize vulnerabilities.

Read the Smart Contract Audit Reports here (Link)

11. User Notice

Besides commercially reasonable means of communication (e.g., social media links posted on the KLAYswap website), KLAYswap can send out notices or inform its users through other commercially reasonable methods. Notices provided by KLAYswap using public communication means are effective immediately

This revision regarding the service will be effective from June 14th, 2023.

Service Agreement Change History

June 18th, 2021 : Initially declared

Dec 27th, 2021 : First revision (Inclusion of contents regarding the provision of liquidity in single, existing pair, plus pair)

Oct 25th, 2022 : Second revision (Inclusion of contents regarding the provision of position deposit)

Jun 14th, 2023 : Third revision (Inclusion of contents regarding the provision of V3 pair deposit)

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Last updated 10 months ago