> For the complete documentation index, see [llms.txt](https://docs.skycastle.network/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.skycastle.network/risks-and-disclaimers.md).

# Risks & Disclaimers

The SKY token is not an investment contract, financial instrument, or security. It does not represent equity, ownership, or a claim on profits of Skycastle or any related entity. Instead, SKY functions as a **membership and coordination token**—a way to access, participate in, and align with the Skycastle network of builders, partners, and council members.

Holding SKY should be understood as holding a s**eat within a network**, not as an expectation of financial return. The design of SKY focuses on aligning contributors, curating deal flow, and coordinating incubation efforts. It is a token associated with **a network of builders and projects**.

## Key Understandings

* SKY is a **utility and membership token**, intended for network participation and alignment.
* There is **no expectation of profit solely from the efforts of others**.
* Contributions of ETH for Partner or Council seats are **network participation commitments**, not investments in a security.
* Skycastle makes no representations or warranties about future value, liquidity, or success.

## Key Risks

* **Market Volatility:** The price of SKY may fluctuate significantly due to market forces outside Skycastle’s control.
* **Liquidity**: SKY may be thinly traded; holders may not be able to exit their position easily.
* **Project Risk**: Incubated builders may fail, deliver below expectations, or abandon projects, reducing NAV.
* **Operational Risk**: Skycastle’s treasury and incubation engine may face technical failures, mismanagement, or unforeseen disruptions.
* **No Guaranteed Buybacks**: While the network intends to use NAV-based buyback mechanisms, execution and outcomes are not guaranteed.
* **Forward-Looking Statements**: Any roadmap or projection in this document is speculative and may not occur as described.

**Participants should engage only if they understand and accept these risks, and only if they wish to actively contribute to the Skycastle ecosystem of builders.**