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Insurance Fund

Leveraged trade inherently imposes some risks on both trader and protocol. During highly volatile market conditions, slippage and delayed execution can result in some accounts having a negative balance post-settlement.


Insurance fund is a safety net that maintain the solvency of the protocol when an account has a negative margin ratio. Losses from liquidations of such accounts are compensated by the insurance fund.

  1. Insurance fund initially is seeded by the team
  2. The initial size of insurance fund is $USDN 10,000
  3. Tsunami imposes 1% fee on each trade. Half of that fee goes to insurance fund
  4. Additionally, during liquidation, a part of liquidation penalty goes to insurance fund