💚Insurance Fund

A fraction of the net fees generated by LN Exchange is allocated to the insurance fund, which serves as reserve capital to ensure the exchange remains solvent in cases where an account holds a negative balance. Such instances may occur if a liquidation process is delayed, resulting in the sale of assets at a value lower than the collateral's worth, thus leaving the account in deficit.

The purpose of this insurance fund is to provide a safeguard, ensuring equitable closure of positions for all traders. Consequently, it fosters trust among larger traders, encouraging them to engage in trading activities on LN Exchange.

The allocation of fees to the Insurance Fund will only begin either upon the official launch (after Phase 3) or at the discretion of the Lnfi team, whichever comes first.