Risks associated with holding RLP

1. Bull Markets

In a bull market, RLP will likely not outperform individual assets within the protocol (eg: ETH, BTC, or FUEL). This is because RLP is a pool containing of a mix of volatile and stable assets

2. PnL Dynamics

Traders' PnL from perpetual trading impacts the RLP pool. If a trader incurs a net positive PnL, the losses are sourced from the RLP pool to compensate the trader. Conversely, if a trader's PnL is a net negative, the gains are deposited into the JLP pool for LP holders.

• Long Trade Scenario: If the trader profits on the long, the JLP pool will lose in token quantity but not in USD value because the underlying token value in the pool appreciates in value as well.

• Short Trade Scenario: If the trader profits on the short, the JLP pool will lose some of the stablecoins but the shorted token will remain the same. This causes a net USD loss on the Pool.

3. Price Fluctuations

The RLP pool consists of both stable and non-stable tokens. Fluctuations in token prices can affect the value of RLP. As a result, users may find that their withdrawn tokens can be worth less compared to their initial deposit. Additionally, deposit and withdrawal fees for the RLP Pool may further reduce the number of tokens withdrawn, particularly for shorter holding periods.