Insurance Fund
Insurance Fund Sources & Growth
The Insurance Fund is funded through Roxom’s initial capital seeding & liquidation gains, where any excess margin from positions closed better than bankruptcy price is transferred to the fund.
The fund grows over time through two main channels:
- Initial Seeding: At launch, Roxom will contribute BTC of its own capital to seed the Insurance Fund. This ensures the fund started at a healthy level to cover early incidents before organic growth kicked in.
- Liquidation Gains (Excess Margin): Whenever a position is liquidated and closed at a price better than the bankruptcy price (meaning there was collateral left over after closing), that leftover collateral is transferred to the Insurance Fund. A trader who gets liquidated does not recover any remaining margin; it’s taken as a contribution to the fund. In normal market conditions with occasional liquidations, the fund steadily grows. It is not built by any direct fee from users, only through these implicit gains.