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Let’s dive a little deeper into the **risks and how to manage them**. **Smart contract risks** are mitigated through rigorous audits by security firms and continuous monitoring. Compound regularly undergoes audits to identify and fix any vulnerabilities in its code. Users can also review the audit reports to assess the platform’s security. **Market volatility** is best managed through careful planning. Always set a safety net by diversifying your holdings. Don't put all your eggs in one basket. If one asset's price drops, you have other assets to offset the loss. **Liquidation risk** can be reduced by maintaining a healthy collateralization ratio. The collateralization ratio is the ratio of the value of your collateral to the value of your borrowed assets. The higher the ratio, the safer you are. Keeping an eye on the market and understanding the collateral requirements is crucial. You might have to add more collateral or pay back a part of your loan if the market turns south. **Governance risks** can be managed by staying updated on community discussions and participating in voting. This way, you can influence the platform’s future direction. Remember, the crypto space is constantly evolving, so continuous learning and adaptability are key.