# Insurance Fund UXD's insurance fund exists for the benefit of UXD holders, so that they do not have to pay the negative [funding rate](https://docs.uxd.fi/uxdprotocol/delta-neutral-position/whats-a-perpetual-future#funding-rates) from the [delta-neutral position](https://docs.uxd.fi/uxdprotocol/overview/delta-neutral-position/delta-neutral-position), 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 [Asset Liability Management Module](https://docs.uxd.fi/uxdprotocol/overview/uxd-basics/asset-liability-management-module-alm) (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. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.uxd.fi/uxdprotocol/overview/insurance-fund.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.