📑 9. Risk Factors

10.1 Market Risks

Crypto Market Volatility: Token price subject to broader market conditions. Mitigation: Strong utility value independent of speculation.

Competition: New entrants may copy mechanics. Mitigation: First-mover advantage, network effects, continuous innovation.

User Adoption: Platform requires critical mass. Mitigation: Aggressive marketing, guaranteed prize pools for early battles.

10.2 Technical Risks

Smart Contract Vulnerabilities: Bugs could lead to fund loss. Mitigation: Multiple audits, bug bounties, insurance coverage.

AI Model Limitations: Generation quality may not meet expectations. Mitigation: Multiple model options, continuous upgrades, user feedback loops.

Scalability: High user volume could overwhelm infrastructure. Mitigation: L2 scaling, cloud auto-scaling, performance testing.

10.3 Regulatory Risks

Token Classification Changes: Regulatory environment evolving. Mitigation: Legal reserve fund, compliance-first approach, geographic flexibility.

Platform Liability: Potential liability for user content. Mitigation: Content moderation, terms of service, appropriate insurance.

10.4 Operational Risks

Team Execution: Ambitious roadmap requires flawless execution. Mitigation: Experienced team, agile methodology, milestone-based approach.

Partnership Dependencies: Reliance on AI providers. Mitigation: Multi-provider strategy, self-hosted fallbacks.