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.


Updated 31 Mar 2022
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