> ## Documentation Index
> Fetch the complete documentation index at: https://flowlayer.mintlify.site/llms.txt
> Use this file to discover all available pages before exploring further.

# Risks

> A clear account of the risks of farming liquidity rewards on Polymarket.

## Rewards Are Not Risk-Free Income

Flowlayer is built to make reward farming safer, not to present it as safe. Reward income can be erased and principal can be lost. Liquidity rewards sit on top of genuine market risk.

<Warning>
  A single adverse fill can erase many days of accumulated rewards. Provide liquidity only with capital you can afford to put at risk.
</Warning>

***

## Specific Risks

<AccordionGroup>
  <Accordion title="Adverse-fill and inventory risk" icon="bolt">
    Resting orders sit near the midpoint and can fill immediately before a sharp move, leaving a position whose loss can exceed the rewards earned. This is the primary risk of reward farming.
  </Accordion>

  <Accordion title="Resolution risk" icon="flag-checkered">
    Prediction markets can resolve suddenly on a news event. A position that appeared sound can become a total loss the moment a market resolves against it, faster than any tool can react.
  </Accordion>

  <Accordion title="Principal loss" icon="circle-exclamation">
    Providing liquidity is not a deposit that returns capital plus yield. If the market moves against an inventory, part or all of the deployed capital can be lost.
  </Accordion>

  <Accordion title="Automation reliability risk" icon="robot">
    Slippage limits cap how poor an automated fill can be, but a tight limit can prevent an exit from filling at all. No automation can act during an outage or, in client-side mode, while the session is closed. Automation reduces risk; it does not remove it.
  </Accordion>

  <Accordion title="Platform and smart-contract risk" icon="link">
    Flowlayer depends on Polymarket and its underlying contracts and APIs. Changes, downtime, or vulnerabilities in those systems are outside Flowlayer's control.
  </Accordion>
</AccordionGroup>

***

## What the Data Shows

* Most traders are unprofitable, and profits are concentrated among a small number of accounts.
* Supply-side earning—liquidity rewards and maker rebates—is more repeatable than directional betting.

<Info>
  Supply-side reward provision is more repeatable than directional trading, but only when the losses that erase it are avoided. That is the purpose of the risk score and alerts.
</Info>

***

## Not Financial Advice

<Note>
  Flowlayer provides information, analytics, and tooling. It does not provide financial, investment, legal, or tax advice, and nothing it surfaces is a recommendation to take any position. Users are responsible for their own decisions and capital.
</Note>