| 1 | The issuer. USDh is a claim on its issuer, HDA. If HDA failed, holders would be unsecured creditors | The reserves are managed by a separate company, PRM, with its own balance sheet. They are bought and held, with no borrowing and no derivatives | The reserves are not held in trust for holders. You have no direct claim on PRM or the reserve assets. USDh is not insured |
| 2 | No independent reserve check yet. You rely on Hamilton’s own figures for what backs USDh | Hamilton publishes its holdings in the app. Supply and contract activity are public on Ethereum. See Verify on-chain | Until an independent firm reports, the reserve figures have not been checked by anyone outside Hamilton |
| 3 | A bug in the code. A flaw in the contract could cause a loss | The contract is small and built on widely used OpenZeppelin code. Every change waits 48 hours in public | The contract has not been independently audited yet. Any code can contain bugs |
| 4 | The admin wallets. Signers could make a mistake, or have their keys stolen | Powers are split across separate wallets that each need several signatures. Major changes wait 48 hours in public | Emergency powers act at once. If enough signers of one wallet were compromised, that wallet could pause or freeze. It still could not take a balance |
| 5 | The market price. USDh can trade below one dollar, especially in stressed markets | Mint Users can redeem with HDA at one dollar, which pulls the price back | Only Mint Users and approved routes redeem directly. Everyone else exits at the market price of the moment |
| 6 | Partners. Reserves, banking and conversions rely on outside firms | Hamilton works with named, established firms. See Partners | If a partner failed, froze accounts or paid late, redemptions could slow down or the reserves could shrink |
| 7 | Other stablecoins. Part of the reserves is held in USDC and AUSD | Only established, fiat-backed stablecoins are held. One that loses its peg can be switched off at once | If one of them lost its peg, the part of the reserves held in it would lose value |
| 8 | Redemption limits and delays. You may not be able to redeem as much, or as fast, as you want | Every limit is published. See Limits and fees | By default a Mint User can redeem half its balance per 7-day window, and HDA can delay a redemption by up to 5 business days |
| 9 | Freezes and pauses. An address can be frozen, or the whole system paused, for sanctions or an emergency | Freezes and pauses can only stop activity. The contract cannot take or move a balance | While frozen or paused, the USDh cannot move |
| 10 | Laws. Rules on stablecoins are changing fast | USDh is not offered in the United States or in sanctioned countries | New rules could limit where or how USDh can be used, or force changes to it |
| 11 | Ethereum. USDh runs on Ethereum | Nothing Hamilton controls | Network fees can spike. A transaction sent to the wrong address cannot be reversed |
