8. Risk Management
To mitigate various risks, both technical and financial, the SHIFT DAO shall develop a comprehensive suite of actions and procedures, as well as implement plans for external control parties to assess and enhance its security capabilities.
Smart contract risk
Explanation: Smart-contract vulnerabilities, hacking attempts, or other cybersecurity threats could compromise the security of the SHFT Token and ARTs it aims to introduce.
Mitigation: Smart-contract audits shall be implemented during the deployment of SHFT Token as well as in further steps of development. Additionally, SHIFT DAO shall launch a Bug Bounty program to incentivise its community members and developers to identify and report vulnerabilities in the smart-contracts, facilitating proactive risk management.
DAO technology risk
Explanation: Dependencies on third-party technologies or infrastructure could expose the SHIFT DAO to technical failures, downtime, or disruptions in service.
Mitigation: The SHIFT DAO shall implement robust monitoring and alerting systems to proactively detect and respond to potential technical issues or disruptions, monitoring key performance metrics, such as blockchain node health, transaction throughput, and network latency, in real-time. The SHIFT DAO members shall have the voting power to control the choice of underlying technology and suggest changes to its underlying infrastructure.
Risk of insufficient funding:
Explanation: Insufficient funding poses a significant risk to the SHIFT DAO, potentially compromising its ability to cover development, marketing, and operational expenses, thus hindering its capacity to achieve its goals and sustain growth.
Mitigation: To address this risk, the SHIFT DAO shall employ a diversified fundraising strategy, including token pre-sales, token sales, strategic partnerships, and community crowdfunding campaigns. Furthermore, meticulous financial planning and budgeting shall be conducted to precisely estimate funding needs and ensure the prudent allocation of resources.
Liquidity risks:
Explanation: Low trading volumes or a lack of liquidity on cryptocurrency exchanges could create challenges for token holders seeking to buy or sell their SHFT tokens and/or ARTs at fair market prices.
Mitigation: To address this risk, the SHIFT DAO shall engage liquidity providers, market makers, pursue listings on reputable exchanges, and offer incentives for liquidity provision. Through strategies such as ensuring widespread token distribution, fostering community engagement, and integrating with stablecoins, we aim to enhance liquidity and accessibility for token holders. * The SHIFT DAO Interface will be functional when the minting and distribution starts
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