Risk & Limitations
This document has described what PURITY enforces. This page describes what it does not — the risks the standard cannot remove, the places where it is honestly centralised, and the limitations a careful participant should weigh. Nothing here is hidden elsewhere in softer language; this is the page the rest of the document must survive.
Market risk is untouched — deliberately
PURITY removes structural unfairness: hidden allocations, discretionary treasuries, insider exits. It does not and cannot remove market risk. A PURITY launch's token can go to effectively zero through nothing but honest market behaviour — insufficient demand, fading attention, better alternatives. The dynamic floor is a computed reference, not a guarantee; the treasury's accumulation is bounded and conditional, not price support. The standard's claim is that outcomes reflect demand rather than extraction — including bad outcomes.
Supporters carry this risk in its sharpest form: a supporter's return is a share of realised liquidation surplus, and if the market never produces conditions the engine will sell into, that share is a share of nothing. Contribution amounts should be sized accordingly.
The engine is disciplined, not clairvoyant
The market-making engine follows rules. It will not catch falling knives (by design), will not sell tops it cannot see (strength is measured against the floor, not the future), and can be out-waited by any patient adversary — its protections are caps and conditions, not intelligence. Wash trading can manufacture pool inflow and trigger liquidations; the caps bound the damage, and the attacker pays the swap fees and price impact, but "the engine sold because someone made the market look strong" is a real, if expensive, scenario. Similarly, the engine's transparency cuts both ways: its thresholds are public, so traders will position around them. That is accepted — predictability is the product.
The keeper dependency
Steady-state liquidation depends on an off-chain keeper making permissionless calls on a cadence. Keeper liveness is a team responsibility, and an outage costs unharvested liquidation opportunities — the value simply never enters the system. Correctness never depends on the keeper; revenue does.
The arbitrator is centralised — and for $PURE, conflicted
Every launch's arbitrator is the PURITY core team's multisig. Its powers are deliberately narrow — execute a shutdown only after a passed holder vote, choose the shutdown mode, cancel a proposal only during its open voting window, sweep only after the one-year claim window — but they are real powers held by a small, identifiable group, and the long-term transition to a DAO or independent body is a commitment, not yet a fact.
Two distinct situations follow:
- For third-party launches, PURITY's arbitration is independence: the launching team holds no shutdown power over its own holders, and the arbitrator has no economic stake in the launch. The trust assumption is that PURITY executes holder-authorised shutdowns honestly and picks modes fairly — with published reasoning each time, and with the mode itself verifiable on-chain.
- For $PURE itself, the team is the arbitrator. Shutdown execution, the No-Traction/Abandonment determination (which decides whether the team is paid), and proposal cancellation cannot be impartial for $PURE, and no framing makes them so. The mitigations are observability — every one of these acts is public, the cancellation power only works in an open voting window, and reasoning is published — and the committed transition. It remains the standard's most honest known limitation.
The arbitrator role is also a liveness dependency at the margins: an authorised shutdown needs the arbitrator to execute within its window, and third-party post-window sweeps need it to act at all. An unresponsive arbitrator delays resolution (though it can never redirect funds to itself — no sweep pays the arbitrator).
Governance has edges
Quorum requires 50% of external supply to vote — a high bar that makes governance deliberately hard to move; a passed proposal reflects real breadth, but a launch with a passive holder base may find governance effectively unavailable. Vote weight snapshots at proposal submission, so tokens bought during a vote carry no weight in it. The shutdown-proposal threshold (0.05%) is small enough that proposal spam is conceivable — the 7-day cooldown and the arbitrator's in-window cancellation are the brakes. And one asymmetry is worth knowing: treasury-release proposals can only ever be initiated by the team address, so holders can refuse releases but cannot initiate them.
Immutability cuts both ways
No parameter can be tuned after deployment — which means a launch with a poorly-chosen (if in-range) configuration lives with it forever, and a genuine improvement to the standard cannot be retrofitted into deployed launches. Upgradability was traded away knowingly: the inability to change the rules is the same property as the inability to rug. New standard versions apply to new launches only.
The contracts are the risk surface
Every guarantee in this document is a property of deployed code. The contracts are audited and the launch factory makes miswiring structurally impossible, but no audit reduces smart-contract risk to zero — an undiscovered defect in the standard's contracts is a risk every launch under it shares. Verification means checking the on-chain provenance registry and reading the deployed configuration, not trusting a website — including PURITY's own.
What "verified PURITY" does and does not mean
A launch that checks out against the factory registry genuinely runs the standard's mechanics: real fair launch, real non-extraction, real independent arbitration. It says nothing about whether the project is good, the team competent, or the token worth buying. The standard guarantees mechanics, never merit — a verified launch can still be a bad idea executed honestly. No badge, index position, or activity metric anywhere in the ecosystem is an endorsement, and anything presenting itself as one should sharpen, not soften, your skepticism.