Tortle Relief Fund
Tortle Relief Fund is still an idea that is being expanded on. This section should be considered as a DRAFT.
In the DeFi landscape, unexpected events can occur, such as technical bugs, exploits, and economic attacks. These events are common and often result in people losing not only their assets but also their confidence in the ecosystem. To address this issue, we have established what we call the Tortle Relief Fund.
Upon successfully completing a transaction on Tortle Ninja, we will kindly ask a nominal insurance fee that is directly allocated towards our dedicated fund. Rest assured that in the rare event where certain users experience financial losses stemming from any unforeseen circumstances related to Tortle Ninja, we will promptly reimburse the entirety of the accumulated insurance fees to those affected. This proactive measure ensures that your contributions serve as a safeguard, offering peace of mind and financial protection within our platform.
The Relief Fund will be operated by a decentralized system of claims and a peer review that, against an incentive, will evaluate all the cases.
A significant portion of Tortle's incentive tokens, called Tortle CatBonds, will be used to create this fund. Users can earn Tortle CatBonds by staking Tortle on Dojos. These CatBonds have different expiration dates, ranging from 3 months to 1 year. During this period, 50% of insurance fees will be distributed among other Tortle CatBonds holders based on their percentage of the fund, with the remainder allocated to the Tortle Relief Fund treasury.
Every time a user wants to get insurance on a Tortle Combo Recipe, we will calculate two items:
- 1.The composition of the operation in terms of LP/Farms and assets involved.
- 2.How much the recipe actually makes.
Each pool or farm will have a rating, which is calculated using a formula that is publicly available. An analyst will later manually curate the rating to prevent any exploits. The formula will be updated periodically.
The total sum insured has the potential to exceed the entire fund. If this occurs, we will inform our users that our funds may only partially cover their insurance fees. Due to changing market conditions, we cannot guarantee full coverage. The partial coverage will be expressed as a percentage (e.g. 35-45%). However, we will strive to link more Tortle CatBonds to try to achieve 100% coverage for all our users.
To mitigate risks, we will create multiple funds based on the performance of the assets. This ensures that highly-rated assets and pools won't be affected in case others fail.
New Tortle Dojos and Tortle CatBonds will be available whenever the maximum insured quantity is in use. Once 75% of our fund has been used to cover our users, Tortle CatBonds will become available for purchase. These bonds have a minimum annual percentage rate (APR) and a maturation period. The minimum APR will be paid as soon as the bond is sold, and the rest will be paid at the end of the maturation period.
Tortle CatBonds work similarly to LP Tokens, and you can even redeem them at a discount before the maturation period.
In the event of a catastrophic event, CatBond investors will lose a portion of their principal to the insured users. The amount they lose depends on the maturity of their bonds. In the most extreme cases, investors will lose all of their funds.
We are currently developing another bond called Tortle Reinsurance. This bond is designed to protect our funds in the event of a catastrophic incident. The Reinsurance fund will only be activated if insurance fails, making it a low-risk investment. Additionally, 25% of the insurance fees will be converted into Stablecoins and offered to Reinsurance bondholders. In exchange, they will deposit their Tortle Tokens into the fund.
Defining a catastrophic event within precise parameters can be a complex endeavor. However, in this specific context, it refers to an event that profoundly impacts a substantial number of users and poses a significant threat to the viability of projects within the broader Fantom ecosystem. Should such an event occur within Tortle Ninja, we have implemented an automatic refund policy to ensure the complete reimbursement of our users' lost funds. This proactive measure underscores our commitment to user protection and demonstrates our dedication to upholding the integrity and trustworthiness of the Tortle Ninja platform.