Redemption Risk
Redemption risk is the risk that an investor cannot redeem an investment for its expected value, at the expected time or under the expected conditions. Redemption may be affected by liquidity, product rules, market disruption or problems involving the issuer or underlying assets.
Why it matters to you
A token may appear to track an underlying asset closely during normal market conditions. The real test can come when many investors want their money back at the same time. Investors should understand how redemption works before they need to use it.
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