# Risks ### Performance Based Returns The value of `shUSD` increases anytime profits are generated and decreases anytime losses are incurred. The collective yield strategy being employed is low risk in nature and seldom produces negative returns, however negative returns are still possible. Hedgemony runs an advanced risk mitigation engine to capture max upside and limit downside exposure for the underlying `USDC` or equivalently priced dollar denominated stablecoins utilized within the yield strategy. ### Third Party Exposure This strategy allocates to select third party applications across the DeFi landscape. Stringent requirements are in place for judging third party applications, including but not limited to comprehensive audits by legitimate security firms, proprietary static analysis of public code bases, historic proof of performance, and sufficient market/liquidity capacities. Numerous criteria must be met before any protocol may be deemed low enough risk and eligible for inclusion into the SherpaEarn strategy, however there are no 100% guarantees that losses will not occur. Low risk does not mean zero risk. Only deposit funds you can afford to lose. --- # 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.sherpa.trade/sherpaearn-vault/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.