Trading Risks#

Every trade on Seesaw carries the risks described below. Read this page before putting capital at risk. Each risk explains what it is, how likely and how serious it is in plain words, and what you can do about it.

The single most important thing on this page: claim your money within 7 days of a market resolving. Everything else is secondary.

The headline risk: abandoning your money#

What it is#

Seesaw never auto-deposits winnings into your wallet. After a market resolves, you trigger the payout (the app's Claim button, which runs the on-chain redeem). That claim pays out everything at once:

• your winning shares at $1 each, and
• any USDT still locked under buy orders that never filled.

While trading is open you can cancel an unfilled order at any time for an instant refund. After resolution, that locked money comes back only through claiming.

Here is the verified timeline (from the on-chain program — Redeem, MarkPositionSettled, ReclaimExpiredOrder, CloseMarket):

In words:

1. Days 0–7 after resolution: this window is reserved for you. Only you can settle your own position. Claim now and you receive everything you are owed.
2. After day 7: the market becomes eligible for permissionless cleanup. A cleanup crank (MarkPositionSettled) pays abandoned positions to their owners — if it runs, your value still lands in your wallet. But it is run by volunteers and keepers, not guaranteed by the protocol.
3. Separately, after day 7 the collateral locked under your never-filled resting buy orders can be terminally removed without a refund as part of cleanup. That value then sits in the market vault.
4. When the market is finally torn down (CloseMarket), whatever remains in the vault — rounding dust plus any abandoned, forfeited value — is swept to the market creator. At that point it is gone for good.

Likelihood and severity#

Entirely under your control. If you claim within 7 days, this risk is zero. If you abandon a position with real value past the grace window, the loss can be total for that value.

How to protect yourself#

• Claim promptly. Treat the moment a market resolves as the moment to collect. The app shows claimable positions in the Portfolio tab.
• Cancel orders you no longer want while trading is open — refunds are instant before resolution.
• Don't park resting buy orders in markets you won't come back to. An unfilled limit buy is locked money with a 7-day post-resolution fuse.
• If you run bots, automate the claim step too, not just order placement.

Oracle outage: the Expired 50/50 fallback#

What it is#

Seesaw resolves markets from Pyth oracle prices. If no acceptable price is available at the market's end (for example an extended Pyth outage for that feed), the market cannot resolve UP or DOWN. After an additional waiting window (set in protocol configuration; the protocol's built-in default is 7 days past the market's end), anyone can flip the market to Expired. The expire crank first tries a late resolution from an acceptable oracle price — only if none exists does it fall back to Expired.

In an Expired market nobody wins or loses:

• Every share — YES or NO — redeems at $0.50.
• Unfilled buy-order collateral is refundable to its owner (via claim, or the permissionless ForceClose escape hatch for stuck markets).

Likelihood and severity#

Rare. Pyth aggregates 90+ publishers and updates sub-second; major feeds going silent for an extended period is unusual. Severity is moderate: you don't lose your collateral, but a winning position pays $0.50 per share instead of $1.

How to protect yourself#

• Nothing to do in advance — this is the protocol's built-in safety net.
• The 7-day claim deadline still applies after expiry. An Expired market stamps its resolution time and runs on the same teardown clock. Claim your 50/50 refund promptly.

Admin powers: pause and post-only — and what they can NOT do#

What it is#

The protocol has an admin authority with two safety switches:

• Pause: blocks new orders, deposits, withdrawals of free balances, and share minting, protocol-wide or per-market.
• Post-only mode: per-market, new orders may only rest on the book — nothing can execute against existing orders (taking is disabled).

What those powers can not do (verified in the program — settlement instructions do not check the pause flag):

• They cannot stop a market from resolving. Lifecycle cranks (end-snapshot, resolve, expire) are permissionless and pause-exempt.
• They cannot block you from claiming. Redeem and ForceClose work during a pause — by design, so an admin pause can never strand user funds in a resolved market.
• They cannot block you from cancelling your resting orders.
• They cannot redirect your payout: every settlement path pays the recorded position owner only.

Likelihood and severity#

Pauses are an emergency tool; expect them to be rare. Severity is bounded: because market durations are capped at 7 days and resolution is pause-exempt, the longest a pause can keep your money in flight is the market's own remaining lifetime — after which your exit is the normal claim path.

How to protect yourself#

• If a market is paused, don't panic — wait for resolution and claim normally.
• Review the protocol's published governance/authority disclosures before treating a deployment as production-grade (upgrade authority, config authority, timelocks).

Market-creator trust#

What it is#

Anyone can create a market. Creators have no settlement power — they can't pick the outcome, change parameters after creation, or redirect payouts. But you should know two things:

1. The creator earns 10% of every taker fee in their market.
2. The creator receives the teardown sweep: rounding dust and any funds abandoned past the 7-day grace window go to the creator when the market is closed (see the headline risk above).

This means a creator profits from abandoned funds — they cannot cause your funds to be abandoned, but they are the beneficiary if you do.

Likelihood and severity#

The creator-sweep only matters if you abandon value (see headline risk). A subtler issue is duplicate or confusing markets: several markets can cover the same asset and window.

How to protect yourself#

• Claim on time — then the creator sweep contains only dust.
• Prefer the canonical market the app surfaces for an asset/window.

Fee parameter changes#

What it is#

Fee settings (the taker-fee cap and curve) are admin-tunable within hard on-chain bounds: the fee cap can never exceed 5%, and updates are rate-limited on-chain (at most one change per hour). Changes are prospective only — a fee change affects future fills, not trades that already executed, and resting orders are charged nothing as makers regardless.

Likelihood and severity#

Low impact. Worst case, the taker fee on your future fills is higher than when you planned the trade, bounded at 5%.

How to protect yourself#

• The app shows the fee in the order preview before you sign — check it.
• See Referrals and Fees for the current defaults.

Stablecoin risk#

What it is#

Markets settle in a stablecoin (USDT on mainnet). Shares pay out in that token at face value: a winning share pays 1 token, which is only worth $1 if the stablecoin holds its peg. A depeg, freeze, or issuer action on the settlement token affects every payout in that market, and is entirely outside the protocol's control.

Likelihood and severity#

Historically rare for major stablecoins but not zero. Severity scales with the depeg — your payout's dollar value moves one-for-one with it.

How to protect yourself#

• Understand you hold stablecoin exposure for the life of every position.
• Size positions accordingly; don't treat "1 share = $1" as a guarantee of dollars, only of tokens.

Smart-contract risk#

What it is#

Bugs or vulnerabilities in the on-chain program itself.

The Seesaw program has not undergone a human third-party security audit. Security measures in place (from the repo's published status):

These reduce risk; they do not eliminate it. No audit, however thorough, makes a smart contract risk-free — and this one hasn't had an external human audit yet.

Likelihood and severity#

Unknown likelihood by nature; potential severity is total loss of funds held by the protocol. This is the standard, honest caveat for any unaudited DeFi protocol.

How to protect yourself#

• Only deposit what you can afford to lose.
• Use official frontends and SDKs; verify transaction contents before signing.
• Watch for the audit status to change (the project publishes it).

Price-band rejections#

What it is#

To stop spam and fat-finger quotes, resting orders must price near the current market: when both sides of the book have live orders, your order must rest within ±10% of the midpoint. With a thin or one-sided book, a wide static band of 1%–99% applies instead. Orders outside the band are rejected with an "order price out of band" error — nothing is lost; the order simply doesn't go on the book.

Immediate-or-cancel orders are exempt (they never rest), and the band can bite honest traders in fast markets: if the mid moves while your transaction is in flight, a previously-fine price can land outside the band and be rejected.

Likelihood and severity#

Common as a minor annoyance in volatile moments; severity is negligible — a rejected order costs you nothing but the transaction fee and a retry.

How to protect yourself#

• Quote near the visible market; re-check the book if you get rejected.
• Use IOC when you just want to take liquidity now.
• See the price band explained.

Market risk (you can just be wrong)#

The basic risk: your prediction doesn't come true and your shares expire worthless. A 100% loss on the stake of any single trade is a normal outcome, not a malfunction.

Protect yourself: size positions so a total loss is acceptable, spread across markets, hedge by holding both sides, or sell early to cut losses — you never have to hold to resolution.

Liquidity risk#

Order books can be thin: wide spreads raise your costs, shallow depth means big orders move the price, and an empty book means no exit until resolution. Each side of the book also holds at most 63 resting orders.

Protect yourself: check the book and the app's fill preview before trading, use limit orders to control your price, and size orders to the visible depth.

Risk summary#

Risk disclosure#

Important: trading binary prediction markets involves substantial risk of loss.

1. You can lose your entire stake on any single trade.
2. Claim within 7 days of resolution — abandoned funds can be permanently forfeited to the market creator.
3. The smart contracts have not had a human third-party audit and may contain undiscovered vulnerabilities.
4. The protocol has no control over oracle prices or market outcomes.
5. On-chain markets depend on Pyth, wallet/RPC infrastructure, available order-book depth, and the disclosed governance authorities.
6. Past performance does not guarantee future results. Only trade with funds you can afford to lose.

Next steps#

• Claiming Winnings — the claim flow and deadlines
• Settlement — payout rules, the 7-day deadline, and the full on-chain mechanics
• How funds move through the protocol
• Market Making and Automation for advanced strategies