> For the complete documentation index, see [llms.txt](https://delpho.gitbook.io/delpho-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://delpho.gitbook.io/delpho-docs/risk/regulatory-and-structural-risk.md).

# Regulatory and structural risk

Two risk classes that sit outside the protocol's mechanical design but materially affect what users and the protocol can do.

## **Regulatory uncertainty**

Synthetic-dollar and yield-bearing-stablecoin instruments face an evolving regulatory environment. Jurisdiction-specific frameworks are in motion globally, and the rules that apply to Delpho today may change.

## **Mitigations:**

* Use of the Delpho application is restricted in certain jurisdictions. See [Restricted jurisdictions](/delpho-docs/legal/restricted-jurisdictions.md).
* A counsel-reviewed Risk Disclosure Statement covers the protocol's regulatory posture. See [Risk disclosure statement](/delpho-docs/legal/risk-disclosure-statement.md).
* The protocol can adjust jurisdiction-level access if the regulatory environment requires it.

**Residual risk:** regulatory direction is outside the protocol's control. Users are responsible for ensuring their use of Delpho complies with their local laws.

## **Venue concentration**

Delpho's hedge runs on Hyperliquid. The protocol is exposed to the operational health of a single hedge venue.

This is a deliberate trade-off, not an accident:

* Same-chain execution via CoreWriter removes bridge risk and cross-venue coordination risk from the rebalance loop. See [CoreWriter and atomic hedge management](/delpho-docs/how-delpho-works/corewriter-and-atomic-hedge-management.md).
* Cross-venue or cross-chain hedging would reduce venue concentration at the cost of adding both of those risks back, plus offchain operational complexity.

A future direction is to diversify the funding source itself by adding additional perp markets (such as BTC and ETH) so that negative funding in one market does not drag the whole book. That diversification is structural rather than jurisdictional.

**Residual risk:** venue concentration on Hyperliquid is a direct dependency at V1. A protocol-level disruption on Hyperliquid would affect Delpho's ability to hedge and rebalance.