Understanding the risks before you deposit

earnXLM is designed to be conservative, but like any DeFi product it carries risks. The main ones are outlined below.

1. Smart contract risk Your funds interact with several protocols, including Templar and Upshift (which hosts the earnUSDC vault). A bug or exploit in any of these smart contracts could result in loss of funds. Gami Labs only integrates audited, established protocols and monitors them continuously with HyperNative.

2. Liquidation risk (carry trade) Because the vault borrows USDC against your XLM, a sharp move in the XLM price could in theory bring the position toward liquidation. This risk is kept low: the vault borrows at a conservative loan-to-value ratio and Gami Labs actively manages the position, but it cannot be eliminated entirely.

3. Underlying strategy risk (earnUSDC) The borrowed USDC is deposited into earnUSDC, a vault hosted on the Upshift protocol and curated by Gami Labs. earnUSDC supplies to lending protocols, a regulated money-market RWA fund (Centrifuge's deJTRSY), and Spectra fixed-yield markets. Risks there include borrower default, RWA counterparty risk, and yield fluctuation. earnUSDC is intentionally conservative (USDC supply-only) but is not risk-free.

4. Stablecoin & de-peg risk The strategy generates yield in USDC. A loss of the USDC peg would affect the value of that yield leg.

5. Yield variability The base yield (2-3%) moves with market conditions and is not guaranteed. Gami Labs actively rebalances to capture the best available opportunities, but returns can go up or down.

6. Incentive program risk The 5% APR relies on an external incentive program paid in XLM. It is guaranteed for a defined period. Once that period ends, the total yield will revert to the base strategy yield.

7. Withdrawal timing The vault keeps a 5% liquidity buffer so that most withdrawals are processed instantly. If you try to withdraw an amount larger than the available buffer, your request will not go through immediately: Gami Labs is alerted, tops up the buffer with the requested amount, and you then resubmit your withdrawal. This can take up to 48 hours. Your funds are never locked, but large redemptions may not be instant.

8. Custody & operational risk Custody is secured through ForDefi's institutional MPC infrastructure and monitored 24/7 by HyperNative. HyperNative is a real-time security and risk monitoring platform that continuously watches the vault's positions and connected protocols for threats, anomalies, and exploit patterns, triggering alerts so Gami Labs can react immediately. While this is best-in-class, no custody or monitoring solution can guarantee absolute protection against all operational or technical failures.

<aside> <img src="notion://custom_emoji/77ce3ed6-cd5f-812b-a359-0003120ba472/2e2e3ed6-cd5f-80cb-ae3f-007ab3133d39" alt="notion://custom_emoji/77ce3ed6-cd5f-812b-a359-0003120ba472/2e2e3ed6-cd5f-80cb-ae3f-007ab3133d39" width="40px" />

Disclaimer

</aside>

This document is issued by Gami Investment Labs SA and is provided for informational purposes only. It does not constitute financial, investment, legal, or tax advice, nor a recommendation, offer, or solicitation to buy, sell, or hold any asset, token, or financial product.

Nothing in this document should be relied upon as a promise or representation as to future performance. Any yield, APR, or return figures are estimates based on currently available information, are not guaranteed, and may vary or cease at any time depending on market conditions, protocol changes, and the duration of any incentive program.

Interacting with DeFi protocols involves significant risk, including the total loss of deposited funds. Risks include, but are not limited to, smart contract vulnerabilities, liquidation, stablecoin de-peg, counterparty and custody failures, and market volatility. You should read the Risk Description in full before depositing.

It is your responsibility to ensure that your use of this product is permitted under the laws and regulations of your jurisdiction. This product may not be available to, or suitable for, residents of certain jurisdictions. By accessing the vault, you represent that you are legally permitted to do so.

Always do your own research and consider seeking advice from a qualified professional before making any financial decision. You are solely responsible for your own decisions and for the security of your wallet and private keys.