# Vault Drawdown Risk Defx Liquidity Engine is a liquidity vault that aims to be market neutral while providing liquidity to Defx's Central Limit Orderbook (CLOB). It, however, has and can experience drawdowns in case of market manipulation, insufficient hedging leading to directional exposure, and losses associated with delayed hedging particularly arising from toxic flow. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.defx.com/docs/risks/vault-drawdown-risk.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.