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Version 1.0 — Effective October 17, 2025 Contact: legal@autheo.com • https://www.autheo.com/nodesale

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Purpose

This Risk Notice summarizes material risks associated with purchasing, holding, transferring, operating, or delegating an Autheo validator node license. It is a readable counterpart to Exhibit E of the Validator Node Purchase & License Agreement and is incorporated by reference into the Node Sale Terms of Service. It is not exhaustive.

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Protocol and software risks

Public blockchains, validator clients, and their dependencies may contain defects or vulnerabilities. Required upgrades or hotfixes can introduce regressions or change validator duties and hardware needs.

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Network and operations risks

Congestion, partitions, DDoS, or peer misbehavior can impair performance or prevent participation. Power, ISP, cloud, or hardware failures can cause downtime or data loss. Poor time synchronization can degrade performance and increase penalties.

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Key management and security risks

Theft, loss, or misuse of private keys can lead to double-signing, slashing, or permanent loss. Misconfigurations (including duplicate validators or unsafe failover) may trigger penalties. Backups can be corrupted; recovery procedures may fail if not tested.

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Slashing, penalties, and economic risks

Consensus faults (including equivocation and double-signing) may lead to on-chain penalties such as slashing or jailing. Downtime and missed duties reduce rewards. No APR/APY, price, liquidity, or financial outcome is promised. Token markets are volatile.

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Governance and policy risks

Governance may adjust emissions, fees, security thresholds, upgrade cadence, or other parameters on a forward-looking basis. Emergency actions (such as hotfixes or temporary halts) may be taken to preserve network security and can affect validator operations and economics.

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Regulatory, sanctions, and tax risks

Laws and regulations applicable to validators, tokens, sanctions, AML, data, and privacy may change. Transactions or distributions may be paused, withheld, or denied to comply with sanctions or legal obligations. You are solely responsible for all tax reporting and payments.

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Third-party and supply-chain risks

Validators rely on third-party providers and open-source software, including ISPs, cloud platforms, HSMs, remote signers, monitoring tools, and OS packages. These may fail, degrade, change terms, or be discontinued.

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Transaction finality and irreversibility

On-chain transactions are generally irreversible. Errors in addresses, fees, contract interactions, or key handling can result in permanent loss. Chain reorganizations or contentious forks may require reconfiguration and operational decisions.

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Privacy and data risks

Network metadata and telemetry can reveal patterns about infrastructure. Personal data submitted for eligibility or compliance is handled per the Autheo Privacy Notice; no system can guarantee absolute security.

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No advice; independent assessment

Autheo does not provide investment, legal, or tax advice and does not act as a fiduciary. You should conduct independent due diligence and obtain professional advice as needed.

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Operator responsibilities

You are responsible for secure operation, timely patching, monitoring, and incident response consistent with the Technical and Uptime Requirements (Exhibit B). Suspected key compromise, double-sign events, or major misconfigurations should be reported promptly using the channels Autheo designates.

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Assumption of risk

By participating in the node sale or operating a validator, you acknowledge and accept the foregoing risks and those inherent to decentralized systems, and you agree that any emissions or rewards are governed solely by protocol logic and Exhibit C.

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Updates

Autheo may update this Risk Notice to reflect new information, security guidance, or regulatory developments. The effective date above will be adjusted when updates occur.