How does the BitMEX insurance fund work?

3 answers

• Abtin RohamiJun 06, 2025 · 2 months ago
  The BitMEX insurance fund is a reserve fund that is used to cover any losses incurred by the platform due to liquidations. When a position is liquidated on BitMEX, the insurance fund is used to cover the difference between the bankruptcy price and the liquidation price. This ensures that traders who were not involved in the liquidation do not suffer any losses. The insurance fund is funded by a portion of the fees collected from trading on the platform. It is designed to provide a safety net and maintain the integrity of the platform.
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• Clay MolloyDec 14, 2024 · 7 months ago
  The BitMEX insurance fund acts as a buffer to protect traders from the risk of clawbacks. Clawbacks occur when there is not enough margin in the system to cover the losses from a liquidation. In such cases, the insurance fund steps in to cover the remaining losses, preventing them from being distributed among profitable traders. This mechanism helps to maintain the fairness and stability of the platform.
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• MAARUF SULEIMANMay 13, 2022 · 3 years ago
  The BitMEX insurance fund is similar to a mutual insurance fund in traditional finance. It is a collective pool of funds contributed by traders on the platform. The fund is used to cover losses that exceed the available margin in the system. By pooling resources, the insurance fund provides a safety net for traders and helps to mitigate the impact of large liquidations. It is an important risk management tool that contributes to the overall stability of the BitMEX platform.
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