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Safety & Best Practices

Essential security and risk management guidelines for using STRATO safely.

Security Checklist

Wallet Security

  • [ ] Never share seed phrase - Not with support, not with anyone
  • [ ] Verify URLs - Bookmark official STRATO URL, watch for phishing
  • [ ] Check transaction details - Review before signing in wallet
  • [ ] Keep backups - Secure seed phrase backup in multiple locations
  • [ ] Use hardware wallet - For large amounts (Ledger, Trezor)

Transaction Security

  • [ ] Start small - Test with small amounts first
  • [ ] Double-check addresses - Verify recipient addresses carefully
  • [ ] Review gas fees - Check Ethereum gas before bridging
  • [ ] Monitor confirmations - Wait for full transaction confirmation

Account Security

  • [ ] Enable 2FA - On centralized services (exchanges, email)
  • [ ] Use strong passwords - Unique password for each service
  • [ ] Beware of scams - Never click suspicious links in Telegram or DMs
  • [ ] Verify support - STRATO team will never DM you first

Risk Management

For Borrowing/Minting

Keep Health Factor / CR Safe:

  • Maintain health factor > 2.0 or CR > 200%
  • Set price alerts for collateral assets
  • Don't borrow maximum - leave buffer
  • Monitor positions daily during volatility

Add Safety Margins: 

Example Safe Position:

- Collateral: 2 ETHST ($6,000)
- Borrow: Only 2,000 USDST (not max $4,200)
- Health Factor: ~2.4 (very safe)
- Can withstand 58% ETHST price drop

Monitor and React:

  1. Check health factor daily
  2. Set alerts at liquidation prices
  3. Have plan to add collateral or repay
  4. Act quickly during market volatility

For Liquidity Provision

Understand Impermanent Loss:

  • Start with stablecoin pairs (minimal IL)
  • Calculate potential IL before depositing
  • Track fees earned vs. IL regularly
  • Only use funds you can afford to hold long-term

Choose Pools Wisely:

  • High volume = more fees to offset IL
  • Check pool size (larger = less slippage)
  • Verify both tokens are legitimate
  • Start with well-known pairs (ETH-USDC)

Example Calculation: 

Pool: ETH-USDC
Deposit: $10,000
Daily volume: $100,000
Fee tier: 0.3%

Daily fees: $100,000 × 0.003 = $300
Your share (1%): $3/day = $90/month

If IL is $50/month: Net +$40/month

For Bridging

Minimize Risks:

  • Double-check destination address
  • Bridge during low gas times
  • Keep transaction hashes
  • Wait for full confirmations (12+ blocks Ethereum)
  • Start with test amount

Gas Optimization: 

High gas time: 8am-5pm UTC weekdays ($30-50)
Low gas time: Weekends/late night UTC ($5-15)

Savings on $10k bridge: $20-35 in gas fees

Common Mistakes to Avoid

1. Borrowing Too Much ❌

Mistake: Borrowing maximum allowed amount

Risk: No buffer for price volatility, instant liquidation risk

Fix: Borrow 50-70% of max, keep health factor > 2.0

2. Ignoring Gas Fees ❌

Mistake: Bridging small amounts when gas is high

Risk: Fees eat into capital

Fix: Check gas prices, bridge larger amounts, use low-gas times

3. Not Monitoring Positions ❌

Mistake: Set and forget

Risk: Liquidation during market moves

Fix: Check daily, set alerts, have action plan

4. Panic Selling ❌

Mistake: Selling collateral at a loss during volatility

Risk: Realizing losses unnecessarily

Fix: Have plan before volatility, maintain high health factor to weather storms

5. Skipping Approvals ❌

Mistake: Not understanding approve + transaction flow

Risk: Confusion, failed transactions

Fix: Expect 2-step process (approve then execute)

6. Withdrawing Too Much ❌

Mistake: Withdrawing collateral without checking health factor

Risk: Triggering liquidation

Fix: Use "max safe withdrawal" in UI, leave buffer

7. Using Full Balance ❌

Mistake: Not keeping USDST for fees

Risk: Can't execute transactions

Fix: Always keep 5-10 USDST reserve

Liquidation Prevention

Watch These Metrics

Daily checks:

  • Current health factor / CR
  • Collateral asset prices
  • Distance to liquidation price

Set alerts at:

  • Health factor < 1.5 or CR < 180%
  • Collateral price drops 10% from deposit
  • Liquidation price approaching

Action Plan

If health factor drops below 1.5:

Option 1: Add Collateral - Fastest way to improve health factor - No need to have extra USDST - Immediately improves position

Option 2: Repay Debt - Reduces risk permanently - Requires having USDST available - May trigger tax event

Option 3: Do Nothing - Only if you're confident price will recover - Very risky below 1.2 - Have plan ready if continues dropping

Example Prevention

Starting position:

- 10 ETH @ $3,000 = $30,000
- Borrowed: 15,000 USDST
- Health factor: 1.6

ETHST drops to $2,700:

- Collateral now: $27,000
- Health factor: 1.44 ⚠️

Action: Add 2 ETH collateral
- New collateral: $32,400
- Health factor: 1.73 ✅ Safe again

Getting Help

Before Asking

  1. Check this documentation
  2. Search community Telegram or FAQ
  3. Review FAQ (if available)

When Asking for Help

Provide:

  • Clear description of issue
  • Steps you've taken
  • Transaction hashes (if applicable)
  • Screenshots (crop out sensitive info)

Never share:

  • Seed phrase / private keys
  • Password
  • Full wallet address publicly

Official Channels

Beware of Scammers

  • Official team will NEVER DM you first
  • Never click links in unsolicited DMs
  • Always verify you're on official channels
  • If something seems too good to be true, it is

Emergency Procedures

If You Think You're Compromised

Immediate actions:

  1. Transfer assets to new wallet immediately
  2. Revoke approvals on compromised wallet
  3. Change passwords on all connected services
  4. Enable 2FA on new accounts
  5. Report to STRATO team and community

If Transaction Stuck

Causes:

  • Low gas price (Ethereum)
  • Network congestion
  • Nonce issues

Fixes:

  • Speed up transaction (if wallet supports)
  • Wait for network to clear
  • Cancel and resubmit with higher gas

If Wrong Address

Unfortunately:

  • Blockchain transactions are irreversible
  • Funds sent to wrong address are likely lost
  • Always double-check addresses

Prevention:

  • Copy-paste addresses (don't type)
  • Verify first and last 6 characters
  • Send test transaction first

Resources

Ready to Start?

With safety practices in mind, choose your path: