Nebula Litepaper
  • šŸ‘‰ Nebula Overview
    • Nebula Intro
      • What is Nebula?
      • The problem
  • Competitive Advantages
    • Innovative Collateralization with DEX LP Tokens
    • Cross-Chain
    • Yield Tranching Mechanism
    • Lending Pools
    • Smart Contract
    • Decentralized Governance
    • Community-Driven Governance
  • Comparison with Competitors (Expanded)
  • ⭐ Product Frature
    • User Roles
      • Supplier
      • Borrower
      • Governance & Participants
      • Developer
  • Protocol Architecture
    • Core Components
    • EVM Compatibility with Enhanced Security
    • Cross-Chain Interoperability via Nibiru’s IBC
    • Advanced Oracle Integration
    • Security
  • Nebula Product
    • Enhanced Liquidity(Upcoming)
    • Customizable Pool Creation
    • Cross-Chain CDP Contracts(Upcoming)
    • Yield Tranching(Upcoming)
  • Use Case(Sample)
  • ⭐ Tech Overview
    • Nebula Technology Overview
      • Consensus and Voting Mechanism
      • Validator-Based Oracle System
      • Risk Management and Security
        • Collateralization Requirements
        • Liquidation Mechanisms
        • Insurance Fund
        • Interest Rate Risk
        • Smart Contract Security
        • Market Risk
        • Governance Risk
        • Cross-Chain Risks
      • Interest Rate Model
        • Types of Interest Rates
        • Interest Rate Adjustments
        • Benefits of the Model
        • Example Scenarios
        • Governance Control
        • Competitive Advantage
      • Governance
        • Governance Framework
        • Token Utility in Governance
        • Governance Process
        • Key Governance Parameters
        • Governance Security
        • Governance Use Cases
        • Long-Term Decentralization
  • šŸ’²Token
    • Token Utility
    • Tokenomics
    • Nebula Token Info
  • šŸ’¹GTM
    • Points System
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  1. ⭐ Tech Overview
  2. Nebula Technology Overview
  3. Risk Management and Security

Insurance Fund

Nebula maintains an insurance fund to protect users from unexpected losses.

Risk Mitigation Reserve

The insurance fund accumulates resources from:

  • A portion of protocol fees

  • Liquidation penalties

It acts as a financial buffer against unforeseen events, such as smart contract exploits or extreme market volatility.

User Protection

In significant loss events, the insurance fund compensates affected users, enhancing confidence in the protocol’s safety measures.

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Last updated 5 days ago