Risks relevant for all cryptocurrencies

Data Losses Risk: affected: All
Some cryptocurrencies make use of blockchain technology. This implies that every bitcoin transaction ever done is recorded on a single blockchain, preserving its full history. Unlike other competitors, AVAX deletes old transaction history. However, this can be detrimental by deleting information that might be needed to trace possible irregularities or damage to currency buyers.

Technology Risk: affected: All
The asset and its service providers may be at risk for operational and information security risks as a result of a cyberattack or cybersecurity breach, including one that affects the blockchain network. The asset may suffer a variety of negative effects from a cybersecurity breach, whether deliberate or unintentional, including a loss of proprietary information, the theft or corruption of data stored online or digitally, denial-of-service attacks on websites or network resources, and the unauthorized disclosure of confidential information.

Risk of losses and volatility: affected: All
The volatility of an asset is a measure of how much the price of a given asset has increased or decreased over time. Generally speaking, the riskier an item can be, the larger returns or greater losses it may have the ability to provide over shorter time periods. The trading prices of many digital assets have experienced extreme volatility in recent periods and may well continue to do so.

Value Risk: affected: All
The use cases for Ethereum outside of payment are still limited in scale, even though they are expected to grow. We don't know how Ethereum will evolve. Ethereum's value could be significantly lost if these additional use cases don't materialize.

Sustainability Risk: affected: All
In September 2022, in an attempt to make its network more sustainable ETH merged with and adopted the proof-of-stake layer. Consequently, this greatly reduces the number of computers needed to maintain the blockchain and can make Ethereum mining less productive.

Centralization Risk: affected: All
After ETH moved to proof-of-stake and transaction validators became Ethereum's stakers, there is a risk that it could easily lead to the centralization of power if a small number of delegates or influential validators gain control over the authority to approve and validate transactions.

Exchange rate risk affected: All
Exchange rate risk is the possibility that the exchange rate between currencies could affect a company's profitability and operations. Therefore, if the currency of the Product differs from the currency you invest in, your final return depends on the exchange rate between your investment currency and the currency of the Product.

Risks relevant for Proof-of-Work based crypto

Proof of Work Risk: affected: All PoW ledgers
In order to validate transactions, the Bitcoin network employs a proof-of-work technique. This necessitates the employment of more powerful computers, huge amounts of energy, and mechanisms that inevitably slow down transaction speeds as a bitcoin network expands. A typical transaction takes over 10 minutes to execute, and Bitcoin can only handle three transactions per second.

Risks relevant for Proof-of-Stake based crypto

Proof of Stake Risk: affected: All PoS based ledgers
For example, Algorand is based in Proof of stake (PoS), which is a cryptocurrency consensus mechanism where the mining and security of the network are determined by the accounts with the biggest stakes in the network. When a small number of owners own a sizable amount of the value of the network's currency, proof of stake poses a security issue, although this is unlikely to happen with big currencies.

Financial disparity: affected: All PoS ledgers
An badly built PoS system might massively benefit those who already possess significant shares in it, resulting in wealth growth being disproportionately credited to them. A basic example is leader-based consensus protocols, in which a subcommittee or a selected leader collects all awards during the protocol's operation, and where the likelihood of being chosen to collect rewards is proportional to the stake, resulting in powerful reward compounding effects.
Furthermore, in PoS systems, there is a phenomena in which larger miners benefit from fewer orphans and less lost effort.

Risks relevant to novel consensus mechanisms

Adversary Risk: affected: All ledgers with Avalanche-like validators
The adversaries of Avalanche have complete access to the state of every single correct node at all times, knows the selections of all correct nodes, and may update its own state at any moment. Except for the capacity to directly alter the state of a correct node or manipulate communication between correct nodes, this adversary is all powerful.

Production Risk: affected: All ledgers with high validator requirements
BTC is a mined cryptocurrency that requires a significant amount of energy, storage space, and processing power. Miners of Crypto Assets may migrate to other networks if the incentives for mining the Crypto Asset are insufficient or transaction validation costs rise significantly, potentially slowing transaction validation and usage. Ethereum transaction or production disruptions might have a detrimental influence on the asset's price.

Other Risks

Real-time Payments Risks: affected: All ledgers with non-instantaneous
Because transactions might take a long time to settle, Bitcoin isn't always the best option for real-time payments. As a result, it is inappropriate for certain commercial purposes. If Bitcoin does not establish itself as a store of value asset or fulfills the requirements of another commercial application, this might lead to a decline in network utilization.

Manufacturing Risk: affected: All ledgers with validator rewards or block production rewards
A decline in mining rewards or significant increases in transaction verification costs may lead to miners switching to other networks, thereby retarding transaction validation and usage. Any hiccup in Bitcoin production or transaction confirmation might have a negative effect on the asset's price

Delay of rewards: affected: All ledgers with validator rewards
Peak traffic on a blockchain network results in delays, a congestion of transactions, and higher transaction fees because demand exceeds supply and miners can choose which transactions to process. Therefore, pay outs and re-investment can be delayed.

Quantum Risk: affected: All ledgers with no quantum-proof cryptography
Since of advancements in the creation of quantum computers and algorithms, post-quantum cryptography has lately attracted extensive interest. Because the Avalanche network concept allows for unlimited number of VMs, it can support a quantum-resistant virtual machine with an appropriate digital signature method. Given this architecture, it is simple to add a new virtual machine that adds quantum safe cryptographic primitives to the system.