Risk Disclosure Statement

Last updated April 20, 2026

This Risk Disclosure Statement (“Statement”) describes material risks associated with using the Otus platform and the Smart Yield Account feature (collectively, the “Services”) provided by Otus Labs, Inc. (“Otus”). It supplements, and should be read together with, the Otus Terms of Service and Privacy Policy.

Please read this Statement carefully before using the Services. By accessing or using the Services, you acknowledge that you have read, understood, and accepted the risks described below. If you do not understand or accept these risks, do not use the Services.

This Statement is provided for informational purposes and does not constitute financial, investment, legal, or tax advice. It is not exhaustive — the risks described here are material risks we want to bring to your attention, but they are not the only risks associated with the Services or with crypto assets generally.

Summary of Key Risks

Before using the Services, you should understand that:

You may lose some or all of the funds you use with the Services. There is no guarantee of yield, principal protection, or availability of funds.
Otus does not custody your funds. Assets remain in your self-custodied wallet. If you lose access to your wallet, Otus cannot recover your funds.
Stablecoins are not risk-free. Stablecoins can lose their peg, become illiquid, or fail entirely.
Smart contracts can be exploited, fail, or behave unexpectedly. Losses from protocol failures may be permanent and unrecoverable.
Autonomous agents act on your behalf within parameters you set. You are responsible for the permissions you grant and the actions taken within them.
Onchain transactions are irreversible. Mistakes, exploits, and unintended outcomes generally cannot be undone.
There is no FDIC, SIPC, or government insurance on any activity through the Services.
The regulatory landscape for crypto assets is evolving and changes may affect the Services, the protocols you interact with, or your ability to access your funds.

Each of these is described in more detail below.

1. Risk of Loss

You may lose some or all of the funds you use with the Services, including through a single event or over time. Losses may result from any combination of the risks described in this Statement. Otus does not guarantee:

Any particular yield, return, or performance outcome;
The preservation of principal;
The availability of funds at any particular time;
The continued operation of any protocol, asset, or service the Services interact with.

Displayed yield figures (including APY) are estimates based on third-party data and market conditions at the time of display. They are variable, may change without notice, and are not projections or guarantees of future performance. Past performance is not indicative of future results.

2. Noncustodial Structure and Self-Custody Risks

The Services are noncustodial. Your funds remain in a wallet you control, and Otus does not hold, custody, or control your funds or private keys at any point.

This structure has important consequences:

Your keys, your responsibility. You are solely responsible for the security of your wallet, private keys, seed phrase, recovery phrase, and any device or service you use to manage them.
Loss of keys means loss of funds. If you lose access to your wallet — whether through lost credentials, a compromised device, a forgotten seed phrase, a hardware failure, or any other cause — you will lose access to your funds permanently. Otus cannot recover your wallet, your keys, or your funds under any circumstances.
Theft and phishing. If your wallet is compromised — for example, by phishing, malware, a fraudulent website, social engineering, or a compromised browser extension — an attacker may be able to drain your funds. Otus has no ability to reverse such transactions or recover stolen funds.
Smart contract approvals. Using the Services requires you to grant smart contract approvals that allow protocols and Otus-operated contracts to interact with your wallet. Approvals you grant — whether through the Services or elsewhere — can be exploited if the underlying contract is compromised, and excessive or unrevoked approvals increase your exposure. You are responsible for reviewing, managing, and revoking approvals as appropriate.

Otus will never ask for your seed phrase or private keys. Any communication claiming to be from Otus that requests this information is fraudulent.

3. Stablecoin Risks

The Smart Yield Account interacts with stablecoins, including USDC, USDT, DAI, and potentially others over time. Stablecoins are designed to maintain a stable value relative to a reference asset (typically the U.S. dollar), but they are not risk-free and are not equivalent to bank deposits or cash.

Specific stablecoin risks include:

Depeg risk. A stablecoin may trade below its intended peg, sometimes substantially and for extended periods. This has occurred multiple times across major stablecoins due to market stress, reserve concerns, banking disruptions, and other factors. A depeg during a period when your funds are allocated can result in losses.
Issuer and reserve risk. Fiat-backed stablecoins depend on the issuer and the reserves backing the token. Risks include reserve shortfalls, mismanagement, fraud, insolvency of the issuer or its banking partners, and disputes over the quality or liquidity of reserves. Different stablecoins have different reserve structures, audit practices, and legal regimes, and these can change.
Redemption risk. Holders generally cannot redeem stablecoins directly with the issuer; redemption is typically available only to approved institutional counterparties. As a retail user, your ability to exit a stablecoin depends on secondary-market liquidity, which can disappear during stress events.
Freezing and blacklisting. Many stablecoin issuers have the technical and contractual ability to freeze or blacklist specific addresses, including in response to legal process, sanctions enforcement, or suspected fraud. If your address or an address in the transaction chain is frozen, you may be unable to move or redeem those tokens.
Algorithmic and crypto-backed stablecoins. To the extent the Services ever interact with stablecoins that are not fully fiat-backed (e.g., crypto-collateralized or algorithmic designs), these carry additional risks including collateral volatility, liquidation cascades, and mechanism failure. Algorithmic stablecoins have failed catastrophically in the past.
Regulatory risk. Stablecoin regulation is evolving. Regulatory action against a stablecoin issuer, a change in law, or loss of banking relationships could impair a stablecoin’s value, liquidity, or ability to operate.

4. Smart Contract and Protocol Risks

The Services route funds to third-party onchain protocols (such as lending protocols, liquidity protocols, and yield aggregators). These protocols are software, and software can fail.

Smart contract vulnerabilities. Smart contracts can contain bugs, logic errors, or design flaws that may be exploited. Exploits have resulted in total loss of user funds across numerous protocols, including well-audited ones. Audits reduce but do not eliminate this risk.
Governance and admin key risks. Many protocols are controlled by governance token holders, multi-signature wallets, or administrators with the ability to change parameters, pause operations, or upgrade contracts. These parties may act negligently, be compromised, or act adversely to user interests.
Oracle failures. Protocols typically rely on price oracles to determine asset values. Oracle manipulation, failure, or delay can cause incorrect valuations, liquidations, or other adverse outcomes.
Liquidity and withdrawal risk. Protocols may impose withdrawal restrictions, pause operations, or become illiquid during market stress. You may be unable to withdraw funds at the time or price you expect.
Composability risk. The Services may interact with multiple protocols in combination. A failure in any one protocol in a chain can affect your funds even if the other protocols operate correctly.
Protocol shutdown. A protocol may be wound down, abandoned, or become unmaintained. Funds in such protocols may be difficult or impossible to recover.

Otus’s review of any protocol — whether at the time of integration or on an ongoing basis — does not constitute a guarantee of safety, performance, or continued operation. Integration of a protocol into the Services does not mean Otus endorses or warrants the protocol.

5. Autonomous Agent Risks

The Services include autonomous agents that execute transactions on your behalf within parameters you configure. This automation carries specific risks you should understand before granting agent permissions.

You are responsible for the permissions you grant. When you enable agent features, you grant the agent authority to act within the scope and limits you set. Actions taken within those parameters are your responsibility, even if the outcome is worse than you anticipated.
Parameter settings matter. The behavior of the agent depends on the settings you choose, including risk tolerances, eligible protocols, and rebalancing thresholds. Misconfigured settings can result in allocations you did not intend, more frequent rebalancing than you expected, or exposure to protocols you did not want.
Model and software risk. The agent’s decisions are produced by software, including machine learning models and automated logic. Software can behave unexpectedly, including in ways that differ from historical behavior or documentation. Models may produce suboptimal, incorrect, or harmful outputs, particularly in market conditions outside their training or testing regime.
Speed of automated action. Agents can execute transactions faster than a human could review them. In adverse conditions — such as a depeg, protocol exploit, or rapid market move — an agent may take actions before you have the opportunity to intervene. Conversely, the agent may fail to act quickly enough to avoid loss.
Timing and MEV. Automated onchain transactions are exposed to maximal extractable value (MEV) activities including front-running, sandwich attacks, and other forms of transaction ordering manipulation. These can reduce the value you receive from a transaction.
Delegation limits. You can revoke agent permissions at any time through the Services or by revoking the underlying onchain approvals. Revocation applies prospectively and does not reverse transactions already executed or initiated.
No human override guarantee. Otus does not guarantee that it will detect, prevent, or override an agent action before it executes. You should not rely on Otus to intervene in individual transactions.

6. Blockchain and Network Risks

The Services depend on public blockchain networks, which carry their own risks.

Irreversibility. Onchain transactions are generally irreversible. Once a transaction is broadcast and confirmed, it cannot be cancelled or reversed by Otus, the protocol, or any third party. Errors — including incorrect addresses, incorrect amounts, or transactions sent to compromised contracts — generally result in permanent loss.
Network congestion and fees. Blockchain networks can experience congestion, resulting in delayed transactions and elevated fees. Fees may exceed the value of the underlying transaction in some cases.
Forks, reorgs, and consensus failures. Blockchains can fork, experience reorganizations, or suffer consensus failures. These events can result in transaction reversal, duplicated or lost funds, and uncertainty about the state of the network.
Network outages. Blockchain networks, including their validators, RPC providers, and related infrastructure, can experience outages that prevent transactions from being submitted, confirmed, or observed. During outages, the Services may be unable to execute transactions, rebalance, or respond to market events.
Censorship and filtering. Validators, sequencers, or infrastructure providers may censor, filter, or deprioritize certain transactions. This can delay or prevent transactions from being included onchain.
Bridge risks. If the Services ever use cross-chain bridges, bridges are a historically high-risk component of the crypto ecosystem. Bridges have been exploited repeatedly for substantial losses.

7. Regulatory and Legal Risks

The regulatory landscape for crypto assets, stablecoins, DeFi protocols, and automated financial services is evolving and uncertain. Changes in law, regulation, or enforcement policy could affect the Services, the assets and protocols the Services interact with, and your rights.

Specific regulatory risks include:

Changes to law. New laws, regulations, or guidance at the federal or state level could restrict, change, or prohibit certain activities conducted through the Services.
Enforcement actions. Regulators have taken and may continue to take enforcement action against crypto platforms, protocols, stablecoin issuers, and service providers. Such actions could affect Otus, the protocols integrated with the Services, or the assets you hold.
Sanctions and compliance actions. Sanctions designations, anti-money-laundering enforcement, or similar actions could affect specific addresses, protocols, or assets, including in ways that could limit your ability to transact or cause you to incur losses.
Tax treatment. The tax treatment of crypto assets, onchain transactions, and yield activity is complex and may be unclear. Rebalancing, protocol interactions, and yield accrual may each be taxable events. You are responsible for determining your tax obligations and for reporting them accurately. Otus does not provide tax advice, and the Services’ reporting outputs (if any) are not a substitute for professional tax advice.
Availability. Otus may be required to restrict the Services, certain features, or access from certain jurisdictions at any time. You may lose access to features or assets as a result of such restrictions.

8. No Insurance or Guarantee

Activity on the Services is not insured by the FDIC, SIPC, NCUA, or any other government or private insurance program. The Smart Yield Account is not a bank account, savings account, or deposit account. Otus is not a bank, broker-dealer, investment adviser, or money transmitter. No government or private backstop exists for losses incurred through the Services.

Some protocols, stablecoin issuers, or third parties may maintain insurance, reserve funds, or similar protections for their own operations. These protections are provided by third parties, are subject to their own terms and limits, and should not be assumed to cover any particular loss you may incur.

9. Third-Party Risks

The Services depend on third parties, including protocol developers, stablecoin issuers, RPC and infrastructure providers, oracle providers, analytics providers, and AI and model providers. Failures, misconduct, security incidents, or discontinuation of service by any of these third parties can affect the Services and may result in losses.

Information displayed in the Services, including yield estimates, protocol data, and asset prices, is derived from third-party sources that Otus does not independently verify and that may be incomplete, delayed, or inaccurate.

10. Operational and Technology Risks

The Services depend on software, networks, and systems that can fail.

Software defects. The Services may contain bugs, errors, or vulnerabilities that could cause unintended behavior, loss of funds, or disclosure of information.
Availability. The Services may be unavailable from time to time due to maintenance, outages, or incidents. During periods of unavailability, you may be unable to monitor activity, change settings, or take action.
Cybersecurity. Otus and its service providers are targets for cyberattacks. A successful attack could compromise the Services, expose information, or affect transactions.
User error. Mistakes you make — including misconfigured settings, incorrect addresses, or inadvertent approvals — can result in losses that cannot be reversed.

11. Conflicts of Interest

Otus and its affiliates may have relationships with protocols, stablecoin issuers, infrastructure providers, or other third parties integrated with the Services. These relationships may include commercial arrangements, incentives, tokens, or other interests. Otus seeks to operate the Services consistently with user interests, but you should be aware that such relationships can create conflicts of interest that may influence integrations, defaults, or displayed information.

12. No Advice

Nothing in the Services or this Statement constitutes financial, investment, legal, or tax advice, or a recommendation to buy, sell, hold, or transact in any asset or to use any protocol. The Services are a technology platform that executes actions within parameters you set. You are solely responsible for evaluating whether the Services and any associated activity are appropriate for you.

You should consult qualified professionals — including financial, legal, and tax advisors — before making decisions about the use of the Services, stablecoins, DeFi protocols, or crypto assets.

Acknowledgment

By using the Services, you acknowledge that:

You have read and understood this Risk Disclosure Statement;
You accept the risks described here and the additional risks that may exist beyond those described;
You are using the Services voluntarily and at your own risk;
You are financially able to bear the loss of any funds you use with the Services.

If you have questions about any of the risks described in this Statement, contact us at info@otus.io before using the Services.

Otus Labs, Inc.
Email: info@otus.io