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The Insurance Fund is a pool of BTC that Roxom uses to cover losses from liquidations when the position can’t be closed without going negative. Its purpose is to protect traders from owing more BTC than they have and to reduce the need for Auto-Deleveraging (ADL).

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How it works

  1. A trader is liquidated when their margin ratio reaches 100%
  2. Roxom tries to close their position at or above the Bankruptcy Price
  3. If the market moves too fast and the position closes below that price, there’s a shortfall
  4. The Insurance Fund covers that shortfall — so the losing trader’s balance doesn’t go negative
  5. Only if the Insurance Fund runs out does ADL come into play
See the full liquidation and Insurance Fund process in the Liquidation Mechanics section of our Rulebook.

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Where the Insurance Fund comes from

The Insurance Fund is mainly built from:
  • Liquidations closed better than the Bankruptcy Price
  • Platform funding in specific cases
Read more about how the fund is maintained in the Insurance Fund section of our Rulebook.

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Why it matters for you

  • Protects your balance — Prevents you from losing more BTC than you deposited
  • Market stability — Reduces the need for Auto-Deleveraging (ADL)
  • Fair trading — Helps ensure fair trading during volatile conditions

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Key takeaways

Important points:
  • The Insurance Fund is your first line of defense after liquidation
  • ADL only happens if the fund can’t cover losses
  • You can monitor ADL risk in your position panel, but you can’t directly see the fund’s balance

How do I view my open orders in Derivatives

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How funding payments work (and when you pay or receive)

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