Insurance Fund

Revenue Allocation and Yield Distribution

Avant strategically allocates its financial resources to maximize security and efficiency. The Avant Protocol takes a cut from yield generated to cover operational expenses, including the insurance fund. For example, if the strategy yield is 50%, and the fee 10%, the user receives 45%, while 5% goes to Avant. This approach ensures that Avant can sustain and grow its operations while users still receive a highly competitive return on their investments.

Distribution Mechanics

For avUSD that is not staked (plain avUSD), a portionof the potential yield that could have been earned if staked is redirected to Avant's operation. The remaining yield benefits savUSD holders, serving as a yield boost to incentivize staking and enhance returns for committed participants in the ecosystem.

Insurance Fund Contributions

At Avant, security is our highest priority. To protect our users and their assets, we have established a robust Insurance Fund that serves as a critical financial safeguard. Initially, 100% of the revenue generated from our operational yield cut and the redistribution from unstaked avUSD is dedicated entirely to this fund, which will also be boostrapped by funds raised by Avant.

The Insurance Fund is meticulously designed to mitigate potential losses from unforeseen black swan events, including DeFi exploits, smart contract vulnerabilities, or systemic failures. By proactively allocating resources to this fund, we ensure that users' assets are protected even under adverse conditions, reinforcing trust and stability within our platform.

Contributions to the Insurance Fund are held in highly liquid stablecoins, providing immediate accessibility when needed. To further enhance the fund's capacity without compromising security, these assets may be prudently deployed in secure DeFi protocols, allowing the fund to grow while maintaining liquidity and minimizing risk. This strategy underscores our commitment to a security-first approach, ensuring that the protection of our users' assets is always at the forefront of our operations.