Risks and assumptions
Smart contract risk
The design intentionally starts with one lending contract to reduce moving parts. That contract still controls FUEL collateral and USDC liquidity, so it needs:
- complete Sway unit/integration tests
- e2e tests through fuels-ts
- min/max checks on amounts, terms, timestamps, and repayments
- event coverage for every state transition
- transferable-owner access-control tests
- independent audit before mainnet launch
Price-oracle risk
A Fuel secp256k1 oracle key signs the FUEL price and timestamp. Compromise or misuse could attest an incorrect price. Attestations expire after five minutes and are chain- and contract-bound. They are intentionally reusable across borrowers and terms while current; the contract computes and enforces all loan terms. The key needs hardened custody, monitoring, and an emergency response plan. The current owner can rotate it onchain; old signatures stop verifying immediately, so owner custody is also security-critical. Stork is optional rather than required.
Liquidity risk
Loans can only open when USDC pool liquidity is available. The UI must clearly show when the pool is fully lent out.
Credit/default and FUEL repayment risk
There are no mark-to-market liquidations. Borrowers must return all USDC principal before maturity; partial repayment is accepted only before that deadline. At maturity, default is terminal: remaining USDC is recorded as defaulted, repayment closes permanently, and unreleased FUEL collateral is claimed into the managed vault. A borrower may still default, and FUEL deployed by the managed vault may face liquidity, counterparty, market-making, or strategy-execution risk.
The managed vault is fully backed for these repayment obligations by the Fuel Ecosystem Fund and Fuel Labs FUEL holdings. That backing reduces expected repayment loss but does not remove smart-contract, custody, timing, liquidity, or operational risk.
Bridge risk
LayerSwap bridging is Phase 3. Until then, assume users already hold FUEL on Fuel Ignition or use an external bridge manually.
Managed strategy risk
Fuel Labs manages the credit vault for the ecosystem. Available FUEL may be used for market-making operations on Reactor and O2 or to support ecosystem collateral such as Moor. These uses introduce venue, counterparty, liquidity, custody, and concentration risks. Operations must preserve recorded loan obligations, maintain sufficient FUEL/USDC liquidity, and be reconciled against immutable original loan and pool accounting.
Admin/key risk
Owner and price-oracle keys must be documented in docs/DEPLOYMENTS.md. Mainnet should use multisig or a similarly robust custody setup, not a single hot wallet.
First-run scripts can create deployer wallets in .secrets/fuel-credit/*.json with the Fuels TypeScript SDK. These files are gitignored, but the seed phrase must be backed up offline immediately. Losing the seed/private key means losing the deployer/admin wallet.
Data/indexing risk
Statistics may be derived from on-chain events, but public metrics are not the source of truth for balances, ownership, loan status, or repayment eligibility; current contract reads are authoritative.