# Risks ## **Is there any risk involved?** As with any decentralized protocol, there are some risks to consider before using the Drops Loans protocol. This includes smart contract risk, which involves the possibility of a bug within the protocol’s code. Drops DAO will undertake the appropriate measures including third-party audits to minimize this risk, however there is always a non-zero chance that a bug may remain. There is also a liquidation risk associated with using the borrowing function in the protocol. Users are clearly communicated collateral ratios and limits, which will need to be adhered to in order to avoid liquidation of the collateral. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.drops.co/links/risks.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.