System-wide insurance

Enjoyoors secures LP risks of users depositing funds into Giga CDP by covering potential losses with its insurance pool. To maintain liquidity in the insurance pool, the protocol collects InsuranceFee, a cut of all yield generated in the protocol.

There are two main risks the protocol avoids via insurance:

• Slashing risks in protocols where gigaAssets are deployed

• Risks of hacks resulting in losses of gigaAssets

In both cases, a user can expect compensation from the insurance pool to cover the loss of initially staked funds. If the insurance pool is insufficiently liquid, the protocol uses its native token treasury to cover potential losses.

In the worst-case scenario, if the insurance pool and token treasury are insufficient to cover the losses, users bear the loss collectively. They commit to repaying a fraction of the lost gigaAssets proportionally to their stakes in protocol vaults before being allowed to withdraw their initial deposits from vaults.