The Insurance Fund is a protocol-level reserve designed to enhance the long-term safety and sustainability of Full Sail. It provides a backstop against unexpected risks and ensures that users are protected in adverse scenarios.

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Sources of Funding

The Insurance Fund is capitalized through:
  • Trading Fees: 5% of all trading fees collected from pools are directed to the fund.
  • Additional Allocations: Governance may direct surplus treasury resources or other revenue streams into the fund when needed.

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Uses of the Fund

The Insurance Fund is deployed only for core protection purposes:
  • Risk Coverage: Protecting users against protocol-level risks, such as contract exploits or oracle manipulation that result in loss of funds.
  • Market Stabilization: Deploying capital in scenarios where liquidity or stability needs to be reinforced.

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Governance Oversight

The Insurance Fund is maintained by the protocol from launch, but direct governance control over its policies will only be introduced once the system is stable. When enabled, veSAIL holders will vote on how the fund is deployed, including decisions related to risk coverage, liquidity support, and long-term sustainability measures. Until then, fund management follows predefined parameters to ensure safety and predictability.

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Long-Term Value

By combining continuous inflows with prudent, governance-directed deployment, the Insurance Fund provides both immediate protection and a long-term source of strength. It reduces systemic risk, reassures users, and allows Full Sail to remain resilient in volatile or adverse conditions.