# Audits & Risks

## Audits <a href="#audits" id="audits"></a>

The Lending & Borrowing Platform has undergone two smart contract audits by the independent auditing firm [BlockSec](https://www.blocksecteam.com/) between February and March of 2022.

For the full reports, see below:

* [Security Audit Report by BlockSec, February 2022 ](https://github.com/NearDeFi/burrowland/blob/main/blocksec-audit-signed-1.pdf)
* [Security Audit Report by BlockSec, March 2022](https://github.com/NearDeFi/burrowland/blob/main/blocksec-audit-signed-2.pdf)

Audits, though a good practice to maintain security standards and minimize potential risks, are not an end-all-be-all when it comes to protocol security. The completed audit of specific contracts does not equate to the security of the entire protocol and does not relate to other layers of risk such as runtime pricing or the human influence on protocols. Moreover, security does not mean the elimination of risk inherent in financial products: always do your own research and manage risk appropriately.

## Risks <a href="#risks" id="risks"></a>

Although we take a multitude of safety precautions and the contracts have been audited, participating in DeFi comes with certain risks. Below is a list of potential risks associated with using the protocol.

## **Smart Contracts Risks**

While our smart contracts have been audited by third-party firms, they could theoretically have vulnerabilities.

## **Liquidation**

Assets that are deposited or borrowed on the protocol could fluctuate in value due to the systemic risks of the issuing platforms or market volatility, including the loss of peg of certain pegged assets. This could result in the [liquidation](https://docs.burrow.finance/product-docs/introduction/audits-and-risks#liquidation-risks) or closing of a user's position.

## **Bad Debt**

The risk of debt accrued by underwater positions in case liquidators do not liquidate in time during a period of high market volatility.

While we do our best to eliminate all the possible risks, DeFi is an industry where events that no one predicted can occur(the dreaded black swans). So please don’t invest your life savings, or risk assets you can’t afford to lose. Try to be as careful with your funds as we are with our code. [😊](https://emojipedia.org/smiling-face-with-smiling-eyes/)


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