> For the complete documentation index, see [llms.txt](https://docs.primestaking.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.primestaking.xyz/for-partners/risk-and-compliance.md). # Risk & Compliance PrimeStaking maintains a comprehensive risk framework and compliance posture designed for institutional partners and regulated environments. *** ## Risk Framework ### Smart Contract Risk | Risk | Severity | Mitigation | | ---------------------- | -------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | Contract vulnerability | High | Independent external audits (QuillAudits - 98.8% score on V1 liquid staking; Nethermind Security NM-0843 on V3 vault + V3 Migration Bridge, all Critical/High/Medium findings Fixed), reentrancy guards, emergency pause on the V3 vault | | Upgrade error | Medium | psXDC v3 vault is **non-upgradeable**; only the NFT staking vault is upgradeable, and only via multisig + delayed governance | | Dependency failure | Medium | Minimal external dependencies; core logic is self-contained | | Economic attack | Medium | Buffer + FIFO queue design, bounded scans, per-report and per-day loss caps | | Migration risk | Low | One-shot atomic migration with `minSharesOut` slippage protection; migration window is gated; failure modes always revert | ### Validator Risk | Risk | Severity | Mitigation | | -------------------------- | -------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | Validator downtime | Medium | Multi-validator delegation, automated failover monitoring | | Slashing (principal-stake) | **None** | XDC's slashing mechanism penalizes downtime via temporary exclusion from block production (\~2h, 4 epochs) and missed rewards, but never burns principal. This is structurally different from ETH-based liquid staking, where slashing can permanently destroy a portion of staked ETH | | Reward rate change | Low | Dynamic APY calculation; transparent communication to partners | ### Network Risk | Risk | Severity | Mitigation | | ------------------ | -------- | --------------------------------------------------------------- | | XDC Network halt | Low | Protocol pauses automatically; no loss of funds | | Fork / chain split | Low | Protocol follows canonical chain; manual intervention if needed | | Congestion | Low | Transaction prioritization; gas optimization in contracts | ### Operational Risk | Risk | Severity | Mitigation | | -------------------- | -------- | -------------------------------------------------------------- | | Key compromise | High | On-chain smart contract custody - no human key access | | Unauthorized upgrade | High | Multisig + timelock governance | | Team dependency | Medium | Open-source contracts; protocol operates autonomously on-chain | *** ## Audit History | Module | Auditor | Findings / Score | Status | | --------------------------------------------------------------------------- | ---------------------------- | ------------------------------------------------------------------------- | ------------------------------------------------- | | **XDC Staking Contract (V1 liquid)** | QuillAudits | 98.8% score | Published | | **psXDC V3 vault + V3 Migration Bridge** (NM-0843) | Nethermind Security | 21 findings (1C / 2H / 1M / 6L / 9I / 2BP): **18 Fixed / 3 Acknowledged** | **Published May 8, 2026** | | **XDC NFT V3 stack** (vault, collection, migrator, harvester, bypass facet) | Internal; Nethermind planned | 46 unit tests + 17-test audit-fix regression battery | Internal review complete; external review planned | **Nethermind Security NM-0843, XDC Prime Stake** (final report, May 08, 2026) covered `PrimeStakedXDC_V3.sol` and `PrimeStakedXDC_V3MigrationBridge.sol` (1,391 LoC). All Critical, High, and Medium findings are Fixed. The three Acknowledged findings are operationally mitigated (loss caps for risk-manager front-running, pre-deployment seed enforcement, and two-call workaround for partial-fill queue redemption). The live vault, `PrimeStakedXDC_V3_2`, is a redeployment of this audited codebase with a scoped delta for the staged collateral transition; a follow-up external audit of the delta is in progress; see [Audits](/security/audits-1.md). [→ Read the full NM-0843 report (PDF)](https://github.com/PrimeNumbersLabs/primestaking-gitbook/tree/main/NM_0843_xdc_prime_stake_FINAL_updated_tests.pdf) All audit reports are published publicly. Target: **>= 95% score** on every audit, with findings of Medium severity or higher resolved within **72 hours**. → [Full Audit Reports](/security/audits-1.md) *** ## Compliance Posture ### Protocol Level * **Non-custodial** - PrimeStaking never takes custody of user funds * **Permissionless** - no KYC/AML at the protocol level (open smart contracts) * **Transparent** - all operations verifiable on-chain * **Jurisdiction-agnostic** - smart contracts operate globally without geographic restriction ### Partner Level Partners integrating PrimeStaking are responsible for: * KYC/AML compliance in their jurisdiction * Sanctions screening for their users * Tax reporting and regulatory filings * Data privacy (GDPR, CCPA, etc.) for their user base PrimeStaking provides the technical infrastructure; regulatory compliance is handled by the partner at the integration layer. *** ## Incident Response | SLA | Target | | -------------------------- | -------------------------------------------------------- | | **Critical vulnerability** | Pause contracts within 1 hour; patch within 24 hours | | **Medium severity issue** | Assess within 4 hours; resolve within 72 hours | | **Low severity issue** | Assess within 24 hours; resolve in next scheduled update | → [SLA & Support](/for-partners/sla-and-support.md) *** ## Liability Framework ### In Case of a Bug or Exploit * PrimeStaking contracts are audited but not guaranteed to be vulnerability-free * In the event of an exploit, the protocol will pause operations, assess damage, and work to recover funds * Partners should carry their own insurance and implement user-facing risk disclosures ### In Case of Delayed Withdrawals * In V3, withdrawals settle **instantly** when the vault buffer covers them; otherwise they enter the on-chain FIFO queue and settle as new deposits, reward inflows, or masternode resignations replenish liquidity. * For redemptions that depend on a masternode resignation, the upper bound is the XDC Network's `candidateWithdrawDelay`, approximately **35 days** under typical real-world block times (longer under network congestion). * PrimeStaking does not guarantee specific withdrawal timelines; the queue is FIFO and depends on network conditions and protocol-level cash flow. * Partners should communicate **both paths** (instant-when-possible and queued-with-self-claim) to their users. ### In Case of Reward Rate Changes * APY is variable and depends on validator performance and network conditions * PrimeStaking communicates material changes to partners with reasonable notice * Historical reward data is available on-chain for forecasting → [Full Disclaimer](/security/audits-1/disclaimer.md)