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  1. Protocol Mechanics
  2. Safety Mechanism

Protocol Reserve

The Protocol Reserve is an asset pool that accrues value from borrower interest payments, as determined by the reserveRate set by governance. Each market has its own reserve.

The Reserve has several functions:

  1. As the second line of defense against bad debt events after the Safety Module has been slashed

  2. To provide additional withdrawal liquidity to LPs in low-liquidity situations

  3. As general funds for governance to use as needed

The Protocol Reserve is displayed in the Markets section.

PreviousRisk ParametersNextSafety Module

Last updated 4 months ago