For holders

Risks

An honest list. Some of these are ordinary DeFi risks, some are specific to Arc, and one of them has no technical mitigation at all.

Start here: this code is unaudited

No third party has reviewed these contracts. Development surfaced two fee-leak bugs and one bug that could have frozen every vault permanently. All three are fixed and covered by tests — but finding three real defects is evidence that more exist, not that the code is now clean. Do not deposit money you cannot afford to lose.

Fees are a certainty, not a risk

Depositing costs 0.5% of what you supply, and the protocol takes 10% of harvested yield. Everything else on this page is a risk that may or may not materialise; these are charges that definitely will.

On a pool with a launchpad tax, a USDC-only deposit also pays that tax on the half it swaps — often several times the entry fee. Supplying both sides avoids it. Full fee breakdown →

Impermanent loss

Your shares track a Uniswap position, so they behave like one. If the token's price moves substantially in either direction, the value of your position will be lower than if you had simply held the two assets separately. Fees offset this; they do not cancel it.

This is not a flaw in Slice — it is what providing liquidity is. But it is the risk most likely to actually cost you money, and it is larger for volatile tokens than the fee yield usually looks.

USDC can be frozen

Arc's USDC consults a compliance blocklist on every transfer, and Circle — not Slice, not you — decides who is on it. The protocol is built so that a blocked treasury or a blocked staker cannot affect anyone else: protocol fees are pulled rather than pushed, and payouts only ever go to the address the caller chose.

But if a vault address itself were ever blocklisted, that vault's funds would be frozen and nothing on-chain could recover them. This is inherent to building on Arc's USDC and no contract design avoids it.

Harvests move the price

Converting the token side of collected fees into USDC is a real swap on the pool, and liquidity providers bear its price impact. It is bounded by a deviation band and the amounts are small relative to pool depth, but it is not free — it is a small, recurring cost carried by stakers.

Large deposits fill partially

A USDC-only deposit that would move the price past the safety band stops early and refunds the remainder. This is the guard working correctly, but it is surprising if you expect the full amount to deploy. Use the two-sided deposit, or split it up.

The oracle needs warming

Automated conversions need 30 minutes of accumulated price observations. Until that window fills, single-sided deposits and compounding revert, and harvests defer the token-side conversion rather than performing it.

Deposits with both sides, withdrawals and claims are unaffected by design — those paths must never depend on a price opinion.

Governance

Each vault has an owner who can change the protocol fee (capped at 10%), the stream and compound split, and the price deviation band. The owner cannot withdraw user funds, mint shares, or pause withdrawals — there is no such function.

Still, an owner key is an owner key. Check who owns a vault before depositing into it; the contracts page lists the current addresses.

Small accounting residues

Each harvest leaves a tiny token balance unconverted, because converting fees is itself a swap that earns the position a fee. It converges geometrically and is carried forward, not lost.
The first deposit into a vault permanently locks 1,000 shares. This is a standard defence against share-price manipulation of later depositors.

Chain and dependency risk

Slice sits on Uniswap v4 and on Arc. A critical bug in either, or a chain-level failure, affects Slice regardless of how correct Slice's own code is.