Is Tokemak Safe?
Risk Grade: C+ (39/100)
Tokemak is rated as elevated risk — multiple novel mechanisms and notable interaction risks.
Moderate risk — loss protection mechanism fails during market crashes when it is needed most, and governance capture is cheap
A liquidity management platform that automatically moves your deposits across different exchanges to find the best yields. It manages $39M in deposits with $28M in funding. Its C+ grade reflects the risk that the protocol absorbs trading losses on your behalf -- and that safety net fails exactly when markets crash and you need it most.
TVL
$39M
Mechanisms
7
Interactions
5
Value Grade
D+
Key Risks for Tokemak Users
The protocol promises to absorb your trading losses, but the backup fund (TOKE tokens) drops in value during the same market crashes that cause the losses
Token holders vote on where your money goes -- at only $12M in token value, someone could cheaply buy enough votes to redirect your deposits for their own profit
The platform is rebranding from Tokemak to Auto Finance with a token swap, adding migration risk and potential for community confusion
Top Risk Factors
- •Protocol absorbs impermanent loss from liquidity providers, transferring systemic downside risk to the platform during market downturns
- •TOKE-directed liquidity routing creates governance capture risk where stakers misallocate liquidity for personal benefit via bribery
- •Rebranding from Tokemak to Auto Finance with TOKE-to-AUTO migration introduces token transition execution risk and community fragmentation
Risk Score Breakdown
Tokemak's highest risk area is Mechanism Novelty (9/15). Here's how each dimension contributes to the overall 39/100 score:
Read the Full Tokemak Risk Report
This protocol has 2 collapse scenarios. 2 high-severity interaction risks identified. See the full mechanism classification, interaction matrix, and deep-dive recommendations.
View Full Report →Considering an investment?