Insurance Fund

An exchange's insurance fund is a pool of capital, built from liquidations closed better than their bankruptcy price, that covers the losses when a liqu…

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What is Insurance Fund in crypto trading?

An exchange's insurance fund is a pool of capital, built from liquidations closed better than their bankruptcy price, that covers the losses when a liquidation fills worse than bankruptcy. It is the buffer between a bad liquidation and auto-deleveraging, and its size is a measure of how much chaos the venue can absorb.

Crypto Jargon

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