UXD Protocol
  • What is UXD Protocol?
  • Overview
    • UXD Basics
      • Asset Liability Management Module (ALM)
    • Delta-Neutral Position
      • What's a "Delta"?
      • Stability through Delta-Neutrality
      • What's a "Perpetual Future"?
    • On-Chain Lending
      • Native Lending
      • Third Party Lending
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      • Credit Structured Products
    • Liquidity Management
    • Insurance Fund
    • Governance Token UXP
    • UXP Token Distribution
    • Risks
      • Rebalancing
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    • How to mint UXD
    • How to redeem UXD
    • Minting/Redeeming FAQ
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  1. Overview

Insurance Fund

PreviousLiquidity ManagementNextGovernance Token UXP

Last updated 2 years ago

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UXD's insurance fund exists for the benefit of UXD holders, so that they do not have to pay the negative from the , if such negative funding rates occur. The insurance fund may also be used in the case of an exploitative hack that results in undercollateralization of UXD's stablecoin. The insurance fund will be managed by the forthcoming UXP DAO. With the introduction of the (ALM), UXD Protocol's insurance fund will act as the "equity/first loss" piece of the protocol, assuming initial losses that may occur from assets held.

UXD's insurance fund was initially capitalized at $57,086,131 as of 11/14/2021. This means that at its initial value, UXD's insurance fund could withstand -11.4% funding rates on $500 milllion of UXD for an entire year.

If the insurance fund is depleted, UXD will hold an auction of UXP tokens to replenish the insurance fund.

delta-neutral position
Asset Liability Management Module
funding rate