Risk & Vault
Market Fee Buffer & Insurance Separation
Per-market fee buffer covers vault losses without ever touching the insurance fund.
Trading fees are pooled per-market during live games, then redirected to cover vault losses before flowing to the treasury — without touching the insurance fund.
Daily settlement waterfall
- 1All games settle — each game's fee buffer calculated
- 2Vault net P&L across all games calculated
- 3If net positive → buffers distribute normally (20% insurance, 55% treasury, 25% liquidity)
- 4If net negative → buffers pooled. Up to 80% covers vault loss. 20% always → insurance fund
- 5Remaining vault deficit (if any) hits depositors
- 6Insurance fund is NEVER touched for vault losses
Separation principle
The insurance fund and vault are separate pools. One-way valve: vault contributes 10% of excess profits to insurance during good months. Fee buffer softens vault losses. But the insurance fund's core balance is never at risk from vault trading.
Related
- Risk Management — what the insurance fund actually covers
- Vault Risk Management — earlier layers protecting depositors
- Fees — where the buffer comes from