Risk Disclosures
Comprehensive risk factors for $FAN token participation—understand what could go wrong before you participate.
You Could Lose Everything
Cryptocurrency involves significant risk. $FAN tokens may become worthless. Only participate with capital you can afford to lose in full. This is not a warning we're required to give—it's the truth about crypto markets.
Why We Show You Everything
Most projects hide unfavorable information. We don't.
Our philosophy: Informed participants make better community members. If full transparency scares you off, you're probably not our target participant anyway. We'd rather have fewer committed believers than many uninformed holders.
Token Value Risks
Price Volatility
Reality: Crypto prices are highly volatile. $FAN could drop 50-90%+ from purchase price.
Mild correction
-20 to -40% from entry
Bear market
-50 to -70% from entry
Severe downturn
-80 to -95% from entry
Project failure
-100% (total loss)
There is no price floor. Working product and real utility provide some fundamental value, but market sentiment can push prices below rational levels for extended periods.
No Guaranteed Returns
We do not and cannot guarantee:
Any specific token price
Any minimum value
Price appreciation over time
Protection from losses
Past performance of other tokens does not indicate $FAN future results.
Liquidity Risk
Despite LP token burn ensuring permanent liquidity:
Trading volume may be insufficient for large positions
Slippage may be significant for large trades
Exit timing matters—selling during low volume = worse prices
Staking Risks
APY Variability
APY depends on total participation. Here's the full picture:
10% (unlikely low)
100M
105%
20%
200M
52.5%
30% (target)
300M
35%
50% (target)
500M
21%
70% (high)
700M
15%
80% (very high)
800M
13%
100% (theoretical)
1B
10.5%
Key insight: If everyone stakes, APY drops significantly. The "up to 105%" scenario requires very low participation, which is unlikely.
Realistic expectation: 15-35% Year 1 APY depending on actual participation.
APY Decline Over Time
Staking rewards decrease each year by design:
Year 1
105M $FAN
100%
Year 2
87.5M $FAN
83%
Year 3
70M $FAN
67%
Year 4
52.5M $FAN
50%
Year 5
35M $FAN
33%
Year 5 rewards = one-third of Year 1. This is sustainable tokenomics, not a flaw—but you should know.
6-Month Cliff
You cannot claim staking rewards for the first 6 months.
Rewards accrue but are locked
Cannot unstake during cliff period
If you need liquidity before Month 7, staking is not for you
Why the cliff exists: Filters short-term speculators, protects long-term community. But it's a real constraint on your capital.
Reward Value Risk
Staking rewards are paid in $FAN tokens.
If $FAN price drops 50%, your rewards are worth 50% less in USD
High APY in tokens ≠ guaranteed USD returns
Token rewards have value only if $FAN has value
Supply & Unlock Risks
Day 1 Circulating Supply
250M tokens liquid on Day 1 (25% of supply):
ICO/Presale
50M
100% liquid
Liquidity Pool
50M
Locked in DEX (LP burned)
Treasury & Ecosystem
150M
Liquid for operations
Total Liquid
250M
Available for trading/selling
Treasury tokens (150M) are under team control for operations, marketing, and development. While governed by multisig and community oversight, these tokens can enter circulation.
Insider Unlock Schedule
Team and early backer tokens unlock over time:
Months 1-12
Cliff period
0 (all locked)
Month 13
Cliff ends
~33M initial unlock
Months 13-60
Linear vesting
~8-10M per month
Year 2 total
~100-120M new tokens
Year 3-5
Continued vesting
~200M additional
Year 2 sees significant new supply entering market. This creates potential sell pressure as insiders may choose to liquidate.
Full Vesting Breakdown
Development
180M
12 months
5 years
~3M/month
Community
120M
12 months
4 years
~3.3M/month
Marketing & Partnerships
100M
12 months
4 years
~2.8M/month
Total Insider
400M
~9M/month
~9 million tokens per month enter circulation starting Month 13. That's potential sell pressure.
Platform Risks
Adoption Risk
Fanbase might not attract sufficient creators or fans.
Creator platforms are competitive
Network effects favor incumbents
User acquisition is expensive
Revenue may not meet projections
Working product reduces but doesn't eliminate this risk.
Competition Risk
Existing and future competitors include:
OnlyFans (dominant incumbent)
Patreon, Ko-fi, Gumroad
Other blockchain creator platforms
Future entrants with better technology or funding
No guarantee Fanbase wins.
Revenue Model Risk
Platform revenue depends on:
Transaction volume (non-stakers paying fees)
Creator earnings growth
User retention
Feature adoption
If transaction volume is low, platform revenue suffers, potentially affecting development and token value.
Technical Risks
Smart Contract Risk
Despite professional audits, smart contracts may contain:
Undiscovered bugs or vulnerabilities
Logic errors exploitable by attackers
Economic attack vectors
Incompatibilities with other protocols
Audits reduce but don't eliminate risk. Major DeFi protocols with multiple audits have been exploited.
Blockchain Network Risk
$FAN operates on Ethereum and Base:
Network congestion can cause high fees
Chain halts or issues can prevent transactions
Bridge risks if transferring between chains
Ethereum upgrades may cause temporary issues
Custody Risk
You are responsible for your own tokens.
Lost private keys = lost tokens (unrecoverable)
Compromised wallet = stolen tokens
Phishing attacks target crypto users
No "forgot password" recovery
We cannot recover lost or stolen tokens.
Regulatory Risks
Evolving Regulation
Cryptocurrency regulation is developing globally:
New laws may restrict token trading
Tax treatment may change
Platform operations may be affected
Geographic restrictions may expand
Regulatory changes could materially impact $FAN utility and value.
Classification Risk
While we believe $FAN is a utility token:
Regulators may classify differently
Security classification would have major implications
Different jurisdictions may reach different conclusions
Legal challenges are possible
Enforcement Risk
Regulatory enforcement actions possible
May affect platform operations
Could impact token liquidity
Legal costs may burden project
Governance Risks
Majority Control
Token-weighted voting means:
Large holders have more influence
Whales can sway decisions
Team + early backers control significant voting power initially
Governance capture is theoretically possible
Execution Risk
Community governance decisions may:
Be poorly designed
Have unintended consequences
Take time to implement
Create disagreement and community splits
Treasury Risk
The 150M treasury token allocation:
Is controlled by multisig (not fully decentralized initially)
Spending decisions affect token supply
Misallocation could harm ecosystem
Governance votes required for large expenditures (but thresholds matter)
External Risks
Market Conditions
Broader crypto market affects $FAN:
Bear markets reduce all token values
Risk-off sentiment hurts newer projects most
Correlation with BTC/ETH movements
Macro economic factors (interest rates, recession)
Black Swan Events
Unpredictable events could impact crypto:
Exchange failures (FTX-type events)
Major protocol hacks
Regulatory crackdowns
Technical failures in Ethereum
Risk Mitigation (What We've Done)
While risks cannot be eliminated, we've implemented:
Rug pull
LP tokens burned (impossible to remove liquidity)
Team dump
5-year vesting with 12-month cliff
Smart contract bugs
Multiple professional audits
Centralization
Governance with community voting
Emergency
Pause function + multisig response
Transparency
On-chain verification + monthly reports
These mitigations reduce but don't eliminate risks.
Risk Summary Table
Token Price
🔴 High
Could lose 50-100%
APY Variability
🟡 Medium
May be 10-35%, not 105%
6-Month Lock
🟡 Medium
No liquidity during cliff
Supply Inflation
🟡 Medium
~9M tokens/month after Year 1
Platform Adoption
🟡 Medium
Competition is real
Smart Contract
🟡 Medium
Audited but not risk-free
Regulatory
🟡 Medium
Evolving landscape
Governance
🟢 Lower
Mitigations in place
Rug Pull
🟢 Minimal
LP burned, impossible
Final Risk Acknowledgment
By participating in $FAN, you acknowledge:
You have read and understood these risk disclosures
You accept that you may lose your entire participation amount
You are not relying on any guarantee of returns
You have conducted independent research
You are participating with capital you can afford to lose
You understand crypto-assets are highly speculative
You accept responsibility for your own financial decisions
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