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Users are our first priority. We ensure claimers are paid out through 4 layers: Insurance Premia, Fund Pool, Vault and MARQ token.
- 1.Insurance PremiaFor the long-term operation of Marquee fund pool, the fund providers have certain advantages over insurance purchasers. Insurance premia is a compensation for providing liquidity into the fund pool and bearing the risk of claims. Therefore, this part of the fund will be used to pay the claims first.
- 2.Fund PoolFund providing is not a principal protected earn product. While earning a high yield by becoming the counterparty of insurance purchasers, fund providers also have the obligation to bear corresponding risks.
- 3.VaultThe maximum occupancy limit of the fund pool is 80%, and the other 20% is kept as the reserve. When 80% of the fund pool is not enough to pay for all outstanding insurance claims, the 20% in reserve can guarantee a high probability of compensation claims.Project return will also be used to pay claims. The ultimate return to Marquee comes from cooperating DeFi insurance projects. Returns generated from the projects are reserved in the vault. If the amount of assets fall under the liabilities in the fund pools, the protocol uses the reserved assets in the vault to provide extra liquidity.
- 4.MARQ TokenIf there are extreme price fluctuations, there may be a situation where the entire amount of the fund pool cannot afford to pay for the claims, i.e., the fund pool is in insolvency. When this happens, Marquee will issue additional governance tokens and sell them in the market to repay the insolvent part of the fund pool to smooth the daily operation of the project. Marquee will repurchase governance tokens through project revenue when the project is running normally.