# Overview

Security is a core foundation of JamFi. The protocol is designed to protect user funds, maintain system stability, and reduce the likelihood of critical failures. Risk management is integrated at every level — from smart contracts and liquidity pools to governance and treasury operations.

**Smart contract integrity** is ensured through multiple layers of audits and testing. Every contract that powers JamFi is reviewed internally and externally before deployment. Post-launch, contracts are monitored with automated tools to detect vulnerabilities or abnormal behavior in real time.

JamFi collaborates with leading blockchain security firms and undergoes regular smart contract audits. Our partners include globally recognized companies that have audited the largest DeFi protocols, ensuring continuous security and compliance for our ecosystem:

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**Liquidity and market risks** are addressed by implementing strict overcollateralization, dynamic liquidation mechanisms, and utilization-based rate adjustments. These measures ensure that loan positions remain secure and that pools stay balanced even under volatile conditions.

**Governance-related risks** are minimized through a hybrid DAO model with timelock mechanisms and multisig treasury control. This prevents malicious or rushed proposals from being executed immediately and ensures oversight by multiple trusted parties.

**Operational risks** such as system downtime or infrastructure overload are mitigated by using scalable cloud architecture and redundancy in critical services. Failover systems are tested regularly to guarantee continuous uptime and availability.

**User-side risks** are also considered. Features such as two-factor authentication, encrypted data storage, and anti-fraud monitoring help protect individual accounts. Educational resources are provided to reduce risks from phishing or mismanagement of private keys.

Finally, JamFi recognizes **regulatory and compliance risks** as a key factor for long-term sustainability. The protocol is built with modular KYC/AML features that can be activated where required by law, while maintaining user privacy in regions where such rules are not mandatory.

Together, these measures create a multi-layered defense strategy that addresses both technical and non-technical risks within the JamFi ecosystem.
