Perpetual Contract Risk Disclosure

Dear Armonia Users,

Perpetual Contracts are crypto asset derivatives that have no expiration or settlement date. They allow users to trade both long and short positions with leverage and are widely used in the cryptocurrency market. Given the high leverage and high-risk nature of perpetual contracts, Armonia hereby issues this risk disclosure. Please read carefully and fully understand the following before using perpetual contract products.

1. Risk of Rapid Loss Due to High Leverage

Perpetual contracts typically support high leverage. Leverage allows you to control a larger notional position with a relatively small amount of capital (margin). Even small market fluctuations can have a magnified impact on your position. If the market moves against your position, you may lose your entire margin and, in extreme cases, incur losses exceeding your initial investment (in the event of liquidation with insufficient margin).

2. Liquidation (Forced Close) Risk

When your position margin falls below the maintenance margin requirement, the system will trigger forced liquidation. During periods of high volatility, low liquidity, or price gaps, your position may be liquidated at a price far worse than expected, potentially resulting in losses exceeding your initial margin.

3. Funding Rate Risk

Perpetual contracts use a funding rate mechanism to anchor prices to the spot market. Depending on market conditions, the funding rate may be positive or negative. Holding positions over time may incur repeated funding payments, which can significantly impact your overall returns.

4. Market Volatility and Liquidity Risk

The cryptocurrency market is highly volatile. Under extreme conditions, prices may fluctuate sharply within a short period, or liquidity may dry up. This can lead to increased slippage, inability to execute orders at expected prices, or even temporary trading interruptions. You should closely monitor market conditions and manage your positions prudently.

5. Liquidation Price and Mark Price Mechanism

Armonia uses a mark price mechanism to determine liquidation conditions, aiming to prevent unnecessary liquidations caused by abnormal market prices. However, the mark price is still influenced by overall market supply and demand. Users should understand this mechanism and actively manage their position risks.

Important Notice

• Perpetual contracts are high-risk financial instruments and are only suitable for users with sufficient trading experience and risk tolerance.
• Please carefully choose your leverage level. First-time users are strongly advised to start with small positions and low leverage. Do not allocate all your funds to contract trading.
• Closely monitor your margin level and liquidation price. Add margin or close positions in time to control risks.
• During extreme market conditions, the platform may implement temporary risk control measures (including but not limited to adjusting leverage limits, restricting position opening, or increasing maintenance margin requirements). Any such adjustments will be announced in advance.
• Armonia does not take responsibility for any profits or losses arising from your contract trading. All trading decisions are made at your own discretion and risk.

If you are not familiar with perpetual contracts or are unsure whether they are suitable for you, we strongly recommend that you refrain from using this product or seek professional advice.