Providing liquidity on Wombat Exchange has potential rewards, and it also has potential risks. Investors should conduct their own research and understand the risks before depositing. Again, DYOR (Do your own research).
Wombat Exchange’s smart contracts were audited by Hacken, Peckshield, and Zokyo. However, security audits don't eliminate risks. Do not invest your life savings or any assets you cannot afford to lose, especially as a liquidity provider.
Wombat will transition to be completely decentralized in the future. Currently, Wombat Emergency DAO has seven members who can act in times of the danger of losing funds. The emergency DAO can call the function of Wombat Pool contracts which disables and reenables all functionality except withdrawals. Wombat’s emergency DAO can add or remove emergency members.
Users interact with multiple smart contract products when staking, and each carries its risks.