Insurance Fund

This section talks about our unique approach to add another safety layer for our users.

Our Insurance Fund is a reserve of funds set aside to cover unexpected losses or events within the ZeroLend ecosystem. A percentage of fees generated by the platform is allocated to this fund, ensuring it grows over time. The primary purpose of the Insurance Fund is to safeguard user assets and provide compensation in the event of unforeseen circumstances.

In traditional finance, banks often insure their customers' deposits. This insurance acts as a safety net, ensuring that depositors' funds are protected up to a certain limit even if the bank faces financial difficulties. Similarly, at ZeroLend, we are committed to building a safety net for our users.

ZeroLend is the only protocol with an Insurance Fund

ZeroLend is the only lending protocol on zkSync that has a native insurance fund. Our insurance fund is our commitment to providing a secure and reliable platform for our users. We aim to create a financial cushion to protect user assets in unexpected events by setting aside some fees to fund the insurance fund.

How the Insurance Fund Works?

In the event of issues like smart contract vulnerability or system failure, the insurance fund can be utilized to compensate affected users. This compensation will cover losses and secure users from financial harm.