Risks and Trust Assumptions

The HOT is a hybrid AMM system with flexible repricing and rebalancing logic, given off-chain instructions signed by a designated HOT Singer.

Even though the HOT smart contract provides a substantial amount of protection mechanisms against known threats such as front-running of swaps and mispriced HOT quotes, as well as circuit breaker capabilities entrusted to the HOT Manager role, it cannot fully protect HOT Liquidity Provider and any respective passive LPs from all potential attack vectors if the on/offchain system is not set with appropriate bounds and precautions.