Defi tokens: Decentralised Finance (or 'DeFi') tokens (e.g. UNI, AAVE) are crypto-assets linked to financial applications and protocols built on decentralised blockchain technology.

Smart contract risk: DeFi relies heavily on smart contracts. Even a minor coding error or oversight can lead to a contract being exploited, potentially resulting in significant losses for DeFi tokens.

Regulatory risk: DeFi operates in a decentralized manner, often without intermediaries or financial crime controls. Regulatory bodies across jurisdictions might introduce new regulations impacting the use, value, or legality of certain DeFi protocols or assets. For example, the Perpetual Protocol (PERP) and Quickstop (QUICK) protocols may be accessible in jurisdictions where some or all the available activity may need to be regulated now or in the future. If a regulator deemed the activity to be in breach of regulation, this could seriously impact token value.

Rug-pulls / Exit scams: Some DeFi projects might be launched by anonymous or pseudonymous teams, increasing the risk of "rug pulls" where developers abandon the project and withdraw funds, leaving investors with worthless tokens.

Data/oracle risk: DeFi protocols often rely on external data sources or 'oracles'. Manipulation or inaccuracies in these data sources can lead to unintended financial outcomes within the protocols.

Protocol complexity: The complexity of some DeFi protocols can make it difficult for average users to fully understand the mechanisms and associated risks.