Smart Contract Risk

When a token’s issuance is the result of a smart contract, this smart contract risk is evaluated by looking at the proven resilience of the smart contract, accepting only those audited rigorously by reputable firms, open source, immutable or multisig and battle tested long enough.

While these factors can reduce risk, they can't eliminate it entirely, making user vigilance and additional measures like bug bounties crucial. The maturity and reliability of a smart contract can be gauged by its usage, community support, and transaction history. Given that smart contract hacks have led to billions in lost funds, tokens with high smart contract risk can be onboarded only with stringent risk mitigation strategies, such as supply caps and/or isolation modes.