Insurance Fund

1. Introduction to the General Insurance Fund:

The primary layer of protection for our stablecoin system is the General Insurance Fund. It serves as a financial buffer against unexpected market volatilities and other systemic risks. However, recognizing the diverse risk profiles of different assets, especially in the intricate world of DeFi, we've developed a more granular approach.

2. The Rationale Behind Asset-Specific Sub-Insurance Funds:

Assets or LP tokens come with distinct risks. To provide tailored coverage without diluting the main insurance pool, we have introduced sub-insurance funds dedicated to specific LP tokens or asset types.

• Tailored Risk Management: Asset-specific sub-insurance funds cater to the unique risks tied to each asset, ensuring comprehensive coverage.

• Strengthened Collaboration with Asset Platforms: Platforms like TOKEMAK, CONVEX, and AURA have a vested interest in bolstering the appeal of their tokens within our stablecoin ecosystem. By supporting their dedicated insurance funds, they can directly contribute to the security and utility of their tokens.

3. Operational Overview of Asset-Specific Sub-Insurance Funds:

• Establishment: Alongside the main fund, distinct sub-funds are created for each LP token or asset type. Each fund's size is calibrated based on the risk profile of its associated asset.

• Contributions from Stakeholders: Platforms like TOKEMAK, CONVEX, or AURA can boost their specific sub-insurance funds. Contributions could stem from a slice of farming rewards, grants, or other financial mechanisms.

• Payout Structure: If a liquidation event occurs linked to an asset, its respective sub-insurance fund is the primary source of coverage. The general insurance fund steps in only after the sub-fund is exhausted.

• Incentive Models: Platforms contributing to the sub-insurance funds might earn a fraction of protocol fees or other rewards, creating a symbiotic relationship that aligns interests and benefits both parties.

• Regular Oversight: To ensure the robustness of each sub-fund, periodic audits and risk assessments are conducted. Depending on market dynamics, asset volatility, and other factors, necessary adjustments are made.