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Liquidity risk: DeFi protocols rely on liquidity providers. Any sudden withdrawal of liquidity (such as whale behavior) may cause market imbalances, increase transaction costs or trigger liquidations Market risk: The functions of many DeFi platforms rely on other mainstream cryptocurrencies, such as Ethereum. The prices of these assets may be highly volatile, causing losses to users, and in serious cases, may have a significant impact on the DeFi ecosystem.
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