Market and Liquidity Risk
Abstract
Market Liquidity risk refers to the potential impediments being introduced into the buy/sell flow for assets. Given that many onchain assets have low and fluctuating liquidity, price impacts at the moment of trade execution are possible and must be avoided wherever possible. At minimum, this risk should be surfaced to users so that they can make informed decisions. This risk includes but is not limited to slippage, price impact, and MEV attacks.
Policy
Endaoment believes in providing tools that connect to investment options with optimal liquidity and preventing against unexpected sub-optimal trade output. We manage these risks through regular code reviews/audits as well as market monitoring.
Scope and Applicability
This policy applied to all Endaoment employees, contractors, board members, and those acting on behalf of Endaoment in any capacity. Non-compliance with this policy may lead to disciplinary action up to and including termination/removal. Should there be a conflict of law, the more stringent of either this policy or the applicable law will be applied.
Operational Controls + Testing
Internal controls will be monitored and/or tested on a periodic basis determined by risk. Monitoring and testing outcomes will be used to inform the continuous improvement of internal controls in order to appropriately mitigate risk.
Training
All Endaoment employees will receive training on Legal Compliance + Regulatory Risk to ensure policy continuity and application. New hires will be trained within their first 60 days, and mandatory incumbent trainings will be conducted bi-annually with all current employees.
Governance
This policy will be reviewed by the executive team and updated semi-annually to ensure it remains up-to-date. Escalation of any questions, concerns, or requests for exceptions regarding this policy must be made to the Endaoment executive team and approved unanimously.