BitMEX has published a detailed blog about the insurance fund to provide adequate information to the people out there. This action has been taken due to numerous queries that were coming up after the recent market crash.
As the whole crypto market was freaking out due to the market crash, BitMEX decided to clear a few things about its fund. All the operational expenses and profits are not at all affected by the insurance fund.
The main purpose of the insurance fund is to act as the last defence line under Auto Deleveraging (ADL). ADL is there to prevent the bankruptcy by deleveraging the position of profitable traders against the liquidated positions.
Through this insurance fund, the traders will receive the profit irrespective of the market conditions. It will not even ask for the payments from the traders whose account balance is in negative. Although it does not give 100 percent assurance to the traders and they might have to face few losses during the difficult market conditions.
The official blog also clarifies that the insurance fund is not at all used to influence the markets in any conditions.
There were certain rumours about BitMEX that it lost all of its funds during the market crash which was later clarified by the exchange.
In the first few days of March, 35,000 to 36,000 XBT stored in the insurance fund. But soon after the bitcoin price drop this number was declined by 10 percent. Although it was able to recover very soon after this decline and again reached 35,000 XBT.
During the market crash, it was reported that BitMEX has gone down because of the two DDoS attacks. Such kind of attacks comes up as a major problem that affects the overall price movement of bitcoin.
You May Also Read.