How Does the Size of the Insurance Fund Reflect on an Exchange’s Risk Management?

A consistently healthy and adequately sized insurance fund is a strong indicator of robust risk management practices. It shows that the exchange's liquidation and margin systems are effective at preventing deficits from reaching other traders.

Conversely, a rapidly depleting or frequently utilized fund may signal insufficient margin requirements or poor liquidation execution. The fund size acts as a public-facing barometer of the exchange's financial stability and operational resilience.