⚠️Warning: Perpetual futures are leveraged products. You can lose the full collateral committed to a position, sometimes even within seconds during a fast-moving market. Only trade with funds you can afford to lose.
Key risks to understand
Leverage amplifies losses, not just gains. The same leverage that lets you control a larger position with less capital also means smaller price moves against you translate into larger losses relative to your collateral.
Liquidation can happen quickly, and it isn't reversible. If the market moves against your position far enough, it's closed automatically and you lose the collateral assigned to it. In fast or volatile markets, this can happen with very little warning. See article Liquidation: Triggers & Price Explained for how liquidation works.
Funding is an ongoing cost (or benefit) while a position stays open. Depending on the funding rate and which side of the market you're on, holding a position open — even one that isn't moving in price — can quietly cost you money over time. See article What Is the Funding Rate?.
You are fully responsible for your own transactions. Solflare Perps is non-custodial: you sign every order yourself, directly with the Phoenix protocol. There's no "undo" button, no chargeback process, and no customer-service reversal for a trade you didn't mean to make.
There's no compensation scheme for your funds. Unlike a bank deposit, funds committed to a perps position (or sitting in your Perps balance) aren't covered by any deposit insurance or investor compensation scheme.
Isolated margin limits — but doesn't eliminate — your loss. Isolated margin means a liquidation only affects one position's collateral, not your whole wallet. It does not, however, protect that position's own collateral from being lost in full.
Protocol risk. Solflare Perps runs on the Phoenix protocol. Like any onchain protocol, it carries inherent smart-contract and operational risk.
Gasless trading is a launch-time feature, not a permanent guarantee. Phoenix currently sponsors network fees and account rent, subject to its own abuse controls. This could change in the future.
Note: This article is educational and general in nature it isn't personalized financial advice. If you're unsure whether leveraged trading is right for you, consider speaking with an independent financial advisor.