There are three main potential risks:
Partner platform risk
We lend directly to prime brokers and institutional investors to earn you higher rates. There is always a risk of partner failure. However, the likelihood of this happening is low.
With all types of lending, borrower default is a risk. We mitigate this with over 125% collateral to protect your funds.
Donut is built on Ethereum's infrastructure, which could potentially fail. This is extremely unlikely.