Safety Mechanism

What is Risk fees?

Risk fees are a security tax on the rewards collected, to ensure the solvency of the guarantee pools in the event of several incidents impacting several protocols before a claim is made.

When providing more than one cover with the same capital, a risk fee is added to the initial fee.

The more liquidity a user provides on different covers with the same capital, the higher the risk fees.

In the example above, the risk fees per additional cover provided are 0.7%

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In the above example, risk fees represent 2.8% of premium income.

This means that 2.8% will be deducted from the premiums received by liquidity provider.

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