> 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/smart-contract-and-execution-risk.md).

# Smart-contract and execution risk

A continuously hedged protocol has more execution surface than a passive CDP. There are three risk classes to consider.

## Smart-contract risk

The smart-contract layer has been audited by Sherlock. The audit scope covered USDV mint contracts, sUSDV staking, the hedge orchestrator, and the CoreWriter integration. Fuzz testing and Slither static analysis run on every pull request in the development pipeline. See [Audits and security](/delpho-docs/audits-and-security.md).

Audits and continuous testing reduce smart-contract risk but do not remove it.

## **CoreWriter timing**

Some CoreWriter actions are intentionally delayed onchain by a few seconds, so the design does not assume zero latency. Same-chain execution removes the cross-venue coordination risk that off-chain hedging strategies have to solve for, but it does not remove market or slippage risk in a fast move, especially during ADL events.

## **Operational surface**

Routine rebalancing and liquidation run programmatically. No externally owned accounts sit in the rebalance loop, which removes key-compromise exposure during fast markets. Administrative authority (pause, upgrade, parameter change) remains a trust surface. See [Governance and parameter risk](/delpho-docs/risk/governance-and-parameter-risk.md) and [Trust assumptions and multisig](/delpho-docs/risk/trust-assumptions-and-multisig.md).

## **Residual risk**

No combination of audit posture, programmatic execution, and same-chain settlement eliminates smart-contract or operational risk. The intent is to minimize each surface and make the remaining authority observable rather than hidden.