Insurance Fund
What is the Insurance Fund?
The Zealous Swap Insurance Fund is a dedicated treasury created to protect users in the event of an unexpected protocol exploit or smart contract hack.
This fund was initially designed to protect Zealous Swap liquidity providers, but it will now be expanded to cover Fervent Finance depositors and lenders as well.
Coverage Scope
The insurance fund provides coverage for:
Exploits or smart contract vulnerabilities on Zealous Swap
Exploits or smart contract vulnerabilities on Fervent Finance
Loss of protocol funds due to code-level vulnerabilities
Note: This fund does not cover trading losses, liquidation losses, or market volatility.
Funding Sources
The insurance fund is continuously growing through multiple sources:
Zealous Swap protocol fees
5% of all Zealous platform revenue
Fervent Finance revenue contribution
5% of all Fervent platform revenue
How Does It Work?
Fervent Finance will allocate 5% of its total platform revenue directly to the Zealous Insurance Fund.
Over time, this creates a large safety net that can be used to reimburse users if a hack were to occur.
The insurance fund is controlled by ZEAL governance through a multisig or DAO setup.
Emergency Compensation
In the event of a hack:
Incident is verified by the core team & auditors
Governance initiates a payout from the insurance fund
Affected users are reimbursed proportionally
Why This Matters
Increases user trust and confidence in both Zealous Swap and Fervent Finance
Acts as an additional backstop beyond standard smart contract audits
Aligns incentives: as the ecosystem grows and generates more revenue, the insurance fund becomes stronger and more capable of protecting users
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