> ## Documentation Index > Fetch the complete documentation index at: https://docs.tythe.finance/llms.txt > Use this file to discover all available pages before exploring further. # Risk Disclosure > The risks of holding, delegating, borrowing, and earning on Tythe, stated plainly, with what Tythe does about each and what it cannot. Tythe is a noncustodial protocol on a public blockchain that arranges undercollateralised credit and lets AI agents act on your money under bounded authority. Its controls contain risk. They do not remove it. This page states each risk, what Tythe does about it, and what remains yours. Nothing on this site is investment, legal, or tax advice. Use Tythe only if you understand these risks and can bear the loss of funds you commit or delegate. ### 1. Loss of lent capital Loans on the credit market are undercollateralised. They are underwritten from data and partially secured by the borrower's lien and by capture at the source of revenue, not fully secured by collateral. Borrowers can default. * **What Tythe does.** Losses are absorbed in a fixed, formally verified order: captured revenue, the borrower's lien, legal recourse, then Tythe's first-loss reserve, and only then lenders, pro-rata. See [First-loss coverage](/get-started/resources/first-loss-coverage). * **What remains yours.** The reserve is finite and disclosed. Losses beyond it reduce lender share value. Tythe does not guarantee principal. In a broad downturn many borrowers can weaken at once, exactly when diversification helps least. ### 2. Agent conduct An agent acts within its mandate, and the mandate is enforced on-chain at your account. But a mandate is only as safe as the ceiling you set. An agent can spend its entire budget on permitted counterparties, draw its entire credit share, or move funds into a permitted venue that performs badly. A poor decision inside scope is still a decision you authorised. * **What Tythe does.** Every numeric field of a mandate has an effective value the Intelligence Layer sets below your ceiling, starting conservatively for a new agent. Anomalies narrow authority automatically; sanctions hits and repeated rejected actions revoke it immediately. Actions above your escalation threshold wait for your approval and fail closed. Sub-agents can only receive a subset of their parent's scope. * **What remains yours.** Under the Agent Authorization you sign, you are responsible for what your agents do within the mandates you give them. Tythe narrows authority on evidence; it cannot prevent every poor decision inside scope, and it does not reverse actions. ### 3. Key management Your account is owned by your key. Your agents hold their own keys. * **What Tythe does.** Tythe holds no keys and cannot move your funds. A leaked agent key can do only what that agent's mandate allows, and you or the Intelligence Layer can revoke it at once. Recovery keys can be configured for your account. * **What remains yours.** If you lose your operator key without recovery configured, access is lost. If an agent key is compromised, the attacker has that agent's authority until revocation. Tythe cannot recover keys or reverse transactions. ### 4. Smart-contract risk Contracts can contain bugs. * **What Tythe does.** Tythe's contracts are built against written invariants, fuzz-tested with guards against hollow tests, mutation-tested, formally verified on their critical properties, statically analysed on every commit, and externally audited before mainnet.
See [Audits and security](/get-started/resources/audits-security). * **What remains yours.** Verification and audit reduce risk; they do not remove it. The venues, facilitators, USDC, the ERC-4337 entry point, and the ERC-8004 registries are third-party code with their own risks, outside Tythe's audits. ### 5. Venue and market risk Save deposits go to third-party venues you or your agent choose. * **What Tythe does.** Tythe curates an allowlist from live verification, publishes per-venue signals and flags (realised yield, depth, redemption latency, cap status, governance risk), and reads value only from each venue's own accounting. Tythe never allocates on its own initiative and takes nothing on venue yield. * **What remains yours.** A venue can lose value, pause withdrawals, hit a supply cap, change parameters, or fail. Venue intelligence is public information, not financial advice. A venue loss is risk you take knowingly. ### 6. Liquidity Not every balance is withdrawable at every moment. * **Liened balance** is not withdrawable while a Loan is open. * **Reserved balance** is held for the remaining budget of live mandates. * **Lender withdrawals** beyond the credit market's liquidity buffer are queued until Loans repay; Loans are fixed-term. * **Venue withdrawals** depend on the venue's own liquidity and any cooldowns. Your idle balance is always withdrawable with your own key, and no pause Tythe can invoke blocks it. ### 7. Payment and rail risk x402 facilitators, USDC, and the fiat rails Tythe routes to are third parties. * **What Tythe does.** Your account signs only intents that fit a live payment session, so a facilitator can only broadcast what you authorised and cannot change amount or destination. Tythe-operated paths use a facilitator that screens for sanctions and risk. * **What remains yours.** A facilitator can fail to settle, a seller can fail to deliver, and public implementations of the rail have had documented flaws. A payment your agent made to a counterparty you allowlisted is your payment. ### 8. Credit terms and capture * **What Tythe does.** Loan rate and term are fixed at origination. There are no origination, application, or prepayment fees and no penalty rate. Capture pulls only inflows tagged as revenue, only up to what is owed, never liened or reserved balance. Tags on plain transfers can be disputed, and a disputed inflow is excluded from capture until resolved. * **What remains yours.** A missed payment incurs a capped late fee and affects your rating. A default consumes your lien, records a legal claim against you, and is pursued. Loans drawn by your agents are your Loans. ### 9. Underwriting and rating * **What Tythe does.** Ratings are produced by a model constrained so it cannot contradict established credit science, with reason codes shown for every rating and a dispute process. Ratings and limits reach the chain only as bounded attestations. * **What remains yours.** A rating is an assessment, not a promise. Your Credit Limit can decrease or increase on re-rating; existing Loans are unaffected, but new draws shrink/expand. Ratings are never negotiated. ### 10. Regulatory * **What Tythe does.** Tythe operates as a noncustodial protocol operator that underwrites and arranges credit. Regulation of that activity varies by jurisdiction and is changing. * **What remains yours.** Availability of Borrow, Lend, and Save, and of individual borrowing in particular, depends on where you are and may change. Tythe may be required to restrict or withdraw services in a jurisdiction. See [Legal](/get-started/resources/legal). ### 10. Data * **What Tythe does.** Bank data is read only with your recorded consent, encrypted, never written to the chain, and purged on revocation. Only a verification reference is on-chain. * **What remains yours.** On-chain activity is public by nature. Your account, mandates, agents' actions, and positions are visible to anyone. ### 11. Concentration and correlation A single borrower's share of the book is capped, and the reserve is sized against the whole book. Neither cap prevents correlated stress: a market-wide event can impair many borrowers and many venues at once. Diversification on Tythe is a mitigation, not a guarantee. ### Reading this page Every control above is real and most are verifiable on-chain. None of them makes Tythe safe in the sense of risk-free. They make the risk defined, ordered, and disclosed, so that a principal deciding what to hold, delegate, borrow, or lend can decide with the whole picture. The waterfall, the reserve, and the lien, end to end. What is on-chain, what is attested, and what Tythe cannot do.