How Does the Insurance Fund Get Replenished?

The insurance fund is primarily replenished by the excess funds generated from liquidations. When a position is liquidated at a price better than the bankruptcy price, the difference between the actual liquidation price and the bankruptcy price is contributed to the insurance fund.

It can also be replenished through a portion of the trading fees collected by the exchange.

How Is the ‘Insurance Fund’ Replenished?
What Is ‘Liquidation Surplus’?
Does the Funding Rate Contribute Directly to the Insurance Fund?
Where Does the Funding for the Insurance Fund Typically Come From?
How Do Exchanges Typically Replenish Their Insurance Funds?
How Do Exchanges Replenish or Grow Their Insurance Funds?
How Is the Insurance Fund Typically Capitalized and Replenished?
How Are the Funds in the Insurance Pool Typically Generated?

Glossar