Insurance Fund

Coverage Protection

The coverage ratio (Backing Assets + Insurance Fund ÷ Total msUSD Issued) transparently measures the protocol's ability to honor redemptions:

• Coverage ≥100%: Full redemption value

• Coverage <100%: Proportional redemption

The Insurance Fund receives 10% of every rebase yield, creating a growing reserve designed to absorb temporary shortfalls during market disruptions or unexpected hedge performance issues. This fund maintains 1:1 redemptions during adverse conditions until exhausted, providing an important buffer against strategy volatility.

A 0.2% fee on mint and redeems sustains protocol operations while remaining competitive for arbitrage. Mint and redeem fees are zero until $100m TVL.