Risk Disclosure

Fan tokens are highly speculative. You can lose everything you put in. Only use money you can afford to lose.

Tokens give you nothing but the token

Holding a fan token gives you no ownership, revenue, royalties, voting rights or claims against the artist or Encore. Trading fees go to the artist, Encore and Meteora, never to holders. A token's price depends only on what others will pay for it.

Most tokens aren't the artist's

Anyone can launch a token for any artist, and one artist can have several. A token that isn't marked Verified has nothing to do with the artist. Even Verified only means the artist can claim the fees held for them. It is not an endorsement of the token or its price.

How prices move

• Before graduation, the price follows a bonding curve. Buying raises it and selling lowers it, so a token can lose most of its value quickly when others sell.
• The launcher can buy in the same transaction that creates the token, before anyone else and at the lowest fee.
• Trading fees are very high right after launch, starting at 50% of a trade and falling to 1% over about two minutes. An extra fee can apply during volatile trading. Details are in Fees.
• When the curve fills, the token graduates to a Meteora pool. Its liquidity there is locked permanently: nobody can withdraw it, but that doesn't guarantee anyone will buy from you.
• Low liquidity, bots and front-running can move prices sharply and cause slippage.

Smart contract and technology risk

• Encore's smart contract has not yet been independently audited. It and Meteora's contracts may contain bugs that lead to the loss of funds.
• Encore is not fully decentralized. An administrator can upgrade the program; change the verification key, treasury and claim window; and pause new launches. The key that approves artist verifications is held by Encore. If it were misused or stolen, artist fees could go to the wrong wallet.
• The Solana network, RPC providers, wallets and Encore's website can be slow or unavailable. Failed transactions still cost network fees.
• Prices, market caps, US dollar values and holder counts on Encore can be delayed or wrong.
• Verification depends on Spotify, SoundCloud and X, which can change or block access at any time.

Your wallet

Transactions are irreversible. If you lose your keys or approve a malicious transaction, nobody can recover your funds. See Wallets and Transactions.

Legal, regulatory and tax risk

Laws on crypto tokens are changing and differ between countries. They could restrict or end your ability to use Encore or trade tokens. You are responsible for any taxes on your trades or claims.