DerivaDEX
  • Overview
  • Introduction
    • Getting started
  • Funding your account
    • Deposits
    • Withdrawals
  • Trading on DerivaDEX
    • Perpetual swaps
      • Funding rate
    • Strategy
    • Fees
    • Position management
      • Order types
    • PNL
    • Liquidations
  • Platform features
    • Insurance fund
    • Trade mining
    • Checkpoints
    • Price feed
  • Security
    • Account data
    • Execution security
  • Technical and Developer
    • API
    • Contract addresses
  • Troubleshooting and FAQ
    • FAQ
    • Troubleshooting
  • Governance
    • DerivaDAO Governance
    • DerivaDEX Improvement Proposals (DIPs)
    • Voting and Delegation
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  1. Platform features

Insurance fund

PreviousLiquidationsNextTrade mining

Last updated 6 months ago

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The DerivaDEX Insurance Fund is a reserve designed to protect traders from losses due to unexpected liquidations or extreme market events. It serves as a safeguard to cover negative balances when a trader's position is liquidated, ensuring that other users are not affected (minimizing the occurence of auto de-leveraging, or ADL).

The fund is maintained by collecting all USDC trading fees and liquidation penalties, and it is managed through the DerivaDAO governance system.

For more information on the insurnance fund, see

this article.