BBX
LEVERAGED TRADING RISK DISCLOSURE STATEMENT
Effective Date: March 27, 2026
WARNING: LEVERAGED TRADING OF PERPETUAL CONTRACTS CARRIES AN EXTREMELY HIGH LEVEL OF RISK AND IS NOT SUITABLE FOR ALL USERS. YOU CAN LOSE YOUR ENTIRE MARGIN DEPOSIT. PLEASE READ THIS WARNING IN FULL BEFORE PROCEEDING.
1. NATURE OF PERPETUAL CONTRACTS
Perpetual Contracts available through the BBX are cash-settled derivative instruments that provide synthetic price exposure to underlying assets (such as NVIDIA stock). Key characteristics:
(a) No Physical Delivery: You do not own, receive, or deliver the underlying asset. All profits and losses are settled exclusively in Stablecoins.
(b) No Expiry Date: Unlike traditional futures, Perpetual Contracts have no expiration. Positions remain open until you close them or are liquidated.
(c) Leverage Amplification: Leverage allows you to open positions larger than your deposited margin. While this amplifies potential gains, it equally amplifies potential losses.
(d) Non-Custodial Execution: BBX operates as a technology provider. All contract execution, margin management, and liquidation are handled by autonomous smart contracts. BBX does not act as a counterparty.
2. HOW LEVERAGE WORKS
When you open a leveraged position, you deposit Stablecoins as margin collateral. The leverage multiplier determines the ratio between your position size and your margin.
THE HIGHER THE LEVERAGE, THE SMALLER THE PRICE MOVEMENT REQUIRED TO LIQUIDATE YOUR ENTIRE POSITION. AT 50x LEVERAGE, A MERE 2% ADVERSE PRICE MOVEMENT WILL RESULT IN TOTAL LOSS OF YOUR MARGIN.
3. FORCED LIQUIDATION (LIQUIDATION)
3.1 How Liquidation Works
When the market moves against your position and your margin balance falls below the maintenance margin requirement, the BBX smart contracts will automatically liquidate (close) your position. This is called forced liquidation.
Liquidation is executed by smart contracts based on real-time price data from on-chain oracles. The process is automated, irreversible, and occurs without prior notice to you.
3.2 Liquidation Risks
(a) Execution Price Risk: During periods of extreme volatility or low liquidity, your position may be liquidated at a price significantly worse than the mark price at the time liquidation was triggered.
(b) Total Loss: Upon liquidation, you will lose your entire margin deposit for the liquidated position. There is no mechanism to recover liquidated margin.
(c) Cascade Liquidation: In extreme market conditions, a large number of liquidations may occur simultaneously, further depressing prices and triggering additional liquidations in a cascading effect.
(d) Oracle Risk: Liquidation prices are determined by on-chain oracle price feeds. Oracle inaccuracies, delays, or manipulation could result in premature or unfair liquidation.
4. FUNDING RATE
Perpetual Contracts use a Funding Rate mechanism to keep the contract price aligned with the underlying asset's spot price. Key points:
(a) The Funding Rate is a periodic payment exchanged between long and short position holders.
(b) If the Funding Rate is positive, long position holders pay short position holders, and vice versa.
(c) The Funding Rate is algorithmically calculated by the BBX smart contracts based on the deviation between the contract price and the oracle price.
(d) Funding payments are deducted directly from your margin balance and may erode your margin over time, increasing your liquidation risk.
(e) BBX does not collect, receive, or benefit from Funding Rate payments. These are settled directly between users on a peer-to-peer basis.
5. ADDITIONAL RISKS
5.1 Volatility Risk
The underlying assets (equities) referenced by Perpetual Contracts can experience extreme price movements during earnings announcements, macroeconomic events, geopolitical crises, or market-wide sell-offs. Leveraged positions are especially vulnerable during such events.
5.2 Liquidity Risk
In periods of market stress, liquidity in the BBX trading pools may be insufficient to close your position at a reasonable price. This is particularly dangerous for leveraged positions where rapid exit is critical.
5.3 Technology Risk
Smart contract bugs, blockchain network congestion, oracle failures, or infrastructure outages may prevent timely execution of your orders or liquidation protection mechanisms.
Under extreme market conditions, any order execution failures, liquidation delays, or price slippage caused by blockchain network congestion are considered inherent risks of decentralized networks. BBX shall not be held liable for any form of financial compensation or indemnity for such losses. By activating leveraged trading, the user acknowledges that they have been fully informed of and voluntarily assume these risks.
5.4 Regulatory Risk
Regulatory changes may affect the availability, legality, or terms of Perpetual Contract trading in your jurisdiction.
6. WHO SHOULD NOT USE LEVERAGED TRADING
LEVERAGED TRADING IS NOT SUITABLE FOR:
(a) Users who cannot afford to lose their entire deposited margin;
(b) Users without prior experience in derivatives or leveraged trading;
(c) Users who do not fully understand the mechanics of margin, liquidation, and funding rates;
(d) Users seeking stable, low-risk returns;
(e) Users who rely on borrowed funds for trading.
7. ACKNOWLEDGMENT AND CONFIRMATION
By accessing the Perpetual Contract trading interface, you confirm that:
- I have read and understood this Leveraged Trading Risk Warning in its entirety.
- I understand that leveraged trading can result in the total loss of my margin deposit.
- I understand the mechanics of forced liquidation, including the risk of liquidation at unfavorable prices.
- I understand that Funding Rate payments may erode my margin and increase liquidation risk.
- I am using only funds that I can afford to lose entirely.
- I understand that BBX is a non-custodial technology service provider and does not provide investment advice or act as a counterparty.