# Understanding Risk ### **Risk Levels** **Safer:** Generally, the maximum drawdown seen for the underlying strategies is less than 10%. **Steady:** Maximum drawdown can be expected to be up to 10%. Smart contract mechanisms will cap the losses at no more than 10% **Riskier:** A maximum drawdown of over 10% is not uncommon. **General Risks:** All cryptoassets come with some form of risk, namely smart contract risk. In addition, other general forms of risk may impact some or all baskets created on the Alpine protocol including de-pegging risk and [impermanent loss](https://cointelegraph.com/explained/what-is-impermanent-loss-and-how-to-avoid-it). De-pegging typically refers to when a crypto asset that aims to maintain a fixed ratio to a given asset -- say 1:1 with the US Dollar -- loses that peg. Tokens that aim to maintain these pegs are often called [stablecoins](https://www.investopedia.com/terms/s/stablecoin.asp) and there have been instances where these [de-pegging events](https://jumpcrypto.com/the-depegging-of-ust/) have resulted in extremely large loses. --- # 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://earn-docs.affinedefi.com/what-is-affine/understanding-risk.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.