Risk Disclosure

Last updated: April 18, 2026

This Risk Disclosure is incorporated into the Terms of Service. It supplements, but does not replace, the risks described there. By using Djinn, you acknowledge that you have read, understood, and accepted the risks below.

1. Testnet Status

At the time this page was written, Djinn operates on Base Sepolia, a public test network. Tokens on Base Sepolia, including the USDC shown in the Djinn interface, have no cash value. They are for testing only. When Djinn migrates to Base mainnet, this page will be updated and deposits will involve real USDC with real economic value. Until then, do not treat testnet balances as representative of mainnet behavior, and do not send real funds to any testnet address.

2. Smart Contract Risk

Djinn is a set of smart contracts on the Base blockchain. Smart contracts are software. Software has bugs. An undiscovered bug, a flawed upgrade, or a compromise of the governance keys could cause you to lose all funds you have deposited. The contracts are open source and have been reviewed internally and by third parties. That does not mean they are free of defects. No review finds every bug.

The Djinn contracts are upgradeable. A privileged multisig operated by Djinn Inc., acting through a 72-hour on-chain timelock on mainnet, can deploy new implementations. An attacker who compromises the multisig, or Djinn Inc. itself acting in bad faith, could theoretically push a malicious upgrade. The timelock gives you time to exit, but only if you are watching the chain.

3. Signal Quality Risk

Signals are analytical predictions. They can be wrong. The service-level agreement mechanism (SLA) provides partial structured compensation if a Genius's aggregated Quality Score is negative, but it does not guarantee accuracy. You can buy signals that turn out to be worthless, and in some scenarios (low-volume Geniuses, settlement delays, protocol bugs) you may receive less compensation than the SLA formula implies.

Past performance shown on any Genius's track record does not predict future performance. A Genius with a long winning streak can start losing tomorrow. Track records on Djinn are verifiable on-chain, but verifiability is not the same as skill.

4. Validator and MPC Risk

The Djinn Protocol depends on a decentralized network of validators on Bittensor Subnet 103. Validators hold Shamir shares of master seeds, perform secure multi-party computation (MPC) to derive signal keys on purchase, and vote on audit outcomes. If too many validators go offline simultaneously, signal purchases can fail, decryption can fail, and audits can stall. Settlement (collateral slashing or release) depends on a validator quorum reaching consensus on on-chain outcomes. Quorum failures, censorship by a colluding subset, or incentive misalignment can delay or prevent settlement.

The MPC protocol itself is a newly deployed cryptographic system. A cryptographic flaw in the MPC implementation could, in principle, allow an attacker with enough compromised validators to reconstruct a seed and read signals, or to sign fraudulent settlements. Current bootstrap parameters (Shamir t-of-n) are documented in the whitepaper and are designed to tolerate a minority of bad validators; they do not tolerate majority collusion.

5. Bittensor Network Risk

Djinn validators and miners are registered on Bittensor Subnet 103 and are rewarded in TAO, the Bittensor native token. The economic security of the validator set depends on TAO having and retaining value, on the Bittensor governance process not materially changing subnet parameters in a way that breaks Djinn, and on the subnet continuing to be registered in good standing. A deregistration event, a hostile governance proposal, or a severe TAO price collapse could weaken validator incentives to the point that settlement is unreliable. TAO holders are subject to their own regulatory, custody, and market risks, independent of Djinn.

6. Blockchain Risk

Transactions on the Base blockchain are irreversible. If you send funds to the wrong address, or sign a malicious transaction prompted by a phishing site impersonating Djinn, those funds are unrecoverable. Network congestion can cause transaction fees to spike. A Base outage, a sequencer failure, or a reorg deeper than the finality threshold could delay, re-order, or, in edge cases, invalidate transactions you believed were confirmed. Base is operated by Coinbase and has its own disclosures and risks; consult Coinbase's materials for details on Base's architecture and governance.

7. Stablecoin Risk

The stablecoin used for settlement is USDC, issued by Circle. USDC is a private stablecoin; it is not a bank deposit, is not FDIC-insured, and is not a claim on the United States government. Its one-to-one peg with the U.S. dollar depends on Circle's ability to honor redemptions. A loss of the peg (de-pegging), a regulatory action against Circle, or an operational failure at Circle could cause USDC to trade below par, which would reduce the real value of your Djinn balance.

8. Regulatory Risk

The legal status of information marketplaces, cryptocurrencies, smart contracts, decentralized finance, and related technologies varies by jurisdiction and is evolving rapidly. Regulators may, at any time, characterize parts of Djinn as a regulated activity (for example, as gambling, money transmission, a securities offering, or commodity trading), whether or not we consider that characterization correct. Regulatory action could force Djinn to restrict service in your jurisdiction, shut down user-facing websites, freeze features, or comply with information requests about users within the reach of applicable law.

Your use of Djinn may itself be illegal in your jurisdiction. You are solely responsible for compliance with all laws applicable to you, including gambling prohibitions, tax reporting, and sanctions law. Djinn does not offer legal advice and is not a substitute for consulting your own counsel.

9. Custody and Private Key Risk

Djinn is non-custodial. Your wallet private key, and if you use a smart wallet your recovery method, are solely under your control. If you lose your key, your seed phrase, or access to your wallet provider, no one at Djinn can restore your funds. If your key is stolen (through a phishing attack, device compromise, malicious browser extension, or other means), the thief can take everything you have deposited. We will never ask for your private key, seed phrase, or password for any reason.

10. Front-End and Infrastructure Risk

The djinn.gg website is one front-end to the protocol. If the front-end is compromised (DNS hijack, TLS compromise, supply-chain attack on our hosting or dependencies), you could be served malicious code that prompts you to sign transactions that drain your funds. To mitigate this, advanced users can interact directly with the smart contracts from a wallet of their choice, or from an independent front-end. The contracts are permissionless; the website is not the protocol.

11. Counterparty Risk (Geniuses and Idiots)

Djinn reduces, but does not eliminate, counterparty risk. Collateral locks create structural protection for Idiots if Geniuses underperform, and Idiot balances are held in contracts, not by Geniuses. But slashing is capped at posted collateral. A Genius who is catastrophically wrong on a long series of signals will only refund up to the collateral they posted; further losses attributed to their signals are not covered. Likewise, an Idiot who defaults on platform fees can only be pursued to the extent of their on-platform balance.

12. Market Manipulation and Insider Risk

Djinn cannot prevent all forms of manipulation or insider abuse. A sophisticated actor could attempt to wash-trade their own signals to inflate a track record, collude with other participants to steer audits, or exploit information asymmetries (advance injury reports, line-movement arbitrage, inside access to officiating or lineups) in ways that disadvantage other users. Our Acceptable Use Policy prohibits these behaviors, but prohibition is not the same as prevention. Bear this risk in mind when evaluating any track record.

13. Operational Risk

Djinn is operated by a small team. The team can make mistakes. Configuration errors, botched deployments, stuck cron jobs, validators running stale versions, or an outage of a third-party service (odds provider, RPC provider, hosting) can cause transient or persistent degradation of service. In rare cases, operational mistakes could affect settlement or pricing. Monitoring and incident response are in place but are not infallible.

14. Credit and Recovery Risk

Djinn Credits are non-transferable, non-cashable platform credits that function only as a discount on future signal purchases. They are not a debt instrument and are not redeemable for cash. A protocol change, contract upgrade, or discontinuation of the service could render credits unusable. Treat them as store credit with all that implies.

15. Loss of Service

Djinn may cease to operate. The team may dissolve, the company may enter bankruptcy, a regulator may compel takedown of the website, or the Bittensor subnet may be deregistered. In any of these events, the smart contracts remain on-chain and, to the extent your funds are in them and withdrawal functions remain callable, you can withdraw. But a fully operational ongoing service is not guaranteed, and the user-interface path to withdrawal may be unavailable.

16. No Financial Advice

Nothing published by Djinn, its officers, employees, contractors, or community members is financial advice, investment advice, legal advice, tax advice, or a recommendation to wager on any outcome. Any decisions you make based on information obtained through Djinn are your own.

17. No Warranty

Djinn is provided “as is” and “as available” without any warranty, express or implied. Nothing on this page, in the whitepaper, on the website, or in any other Djinn material constitutes a warranty of functionality, uptime, accuracy, fitness for purpose, merchantability, non-infringement, or freedom from defect.

18. Acknowledgment

By connecting a wallet to Djinn, interacting with the API, or depositing funds, you acknowledge that you have read this Risk Disclosure in full, that you understand each risk described, and that you accept full responsibility for your own conduct and for any loss that may arise from your use of the protocol.