> For the complete documentation index, see [llms.txt](https://docs.bamk.fi/bamkfi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.bamk.fi/bamkfi/resources/risks.md).

# Risks

The launch of Nakamoto Dollar is happening over two distinct phases. The risks associated with each phase are highlighted here.

## Phase 1 Risks

In phase 1, NUSD is backed 1:1 with USDe, held as staked USDe (sUSDe) in our backing address.

The primary risk here is related to Ethena itself as USDe is the synthetic dollar of Ethena. Hence all the risks highlighted by Ethena in these 5 sections will apply:

1. [Funding Risk](https://ethena-labs.gitbook.io/ethena-labs/solution-overview/risks/funding-risk)
2. [Liquidation Risk](https://ethena-labs.gitbook.io/ethena-labs/solution-overview/risks/liquidation-risk)
3. [Custodial Risk](https://ethena-labs.gitbook.io/ethena-labs/solution-overview/risks/custodial-risk)
4. [Exchange Failure Risk](https://ethena-labs.gitbook.io/ethena-labs/solution-overview/risks/exchange-failure-risk)
5. [Collateral Risk](https://ethena-labs.gitbook.io/ethena-labs/solution-overview/risks/collateral-risk)

## Phase 2 Risks

TBA