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:
As the second line of defense against bad debt events after the Safety Module has been slashed
To provide additional withdrawal liquidity to LPs in low-liquidity situations
As general funds for governance to use as needed
The Protocol Reserve is displayed in the Markets section.
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