2min

Insurance Fund

The protocol's Insurance Fund ("IF") is in place to cover any unexpected losses incurred from leveraged trading. It's a backstop in place to maintain the solvency of the protocol in the event user accounts have a negative balance.

The IF serves to provide protocol users with confidence by preventing bankruptcies and ensuring that all positions are made whole.

The IF automatically:

  • pays for all levered losses incurred by protocol users; and
  • recieves a fraction of collateral from successful/valid liquidations.

The IF also receives a fraction of collected fees from the platform's trading activity.

In addition to the collective pool, each market also has its own IF pool based on fees paid.

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Updated 31 Mar 2022
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