# Risk Architecture Participating in RWA protocols involves distinct risk vectors compared to pure crypto-native DeFi. * **Credit/Default Risk:** The primary risk is that the real-world borrower fails to repay the invoice. PayVia mitigates this via over-collateralization, legal recourse structures, and Junior/Senior tranche waterfalls (Junior capital takes first loss). * **Smart Contract Risk:** Code vulnerabilities. Mitigated by double-audits (e.g., Trail of Bits, OpenZeppelin) and a bug bounty program. * **Liquidity Risk:** In the event of high utilization, LPs may face a delay in withdrawal until borrowers repay. * **Regulatory Risk:** Changes in securities law or stablecoin regulation. PayVia’s modular compliance layer is designed to adapt to shifting legal frameworks. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.payvia.xyz/8.-risk-management-and-disclosure/risk-architecture.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.