Insurance Funds act as safety nets to mitigate the impact of counterparty liquidations, protecting traders from significant losses due to bankrupt positions and ensuring that profits are fully paid out to winning traders.

A trader's position is liquidated if their available collateral falls below the required margin. A position is considered bankrupt if, after liquidation, the trader's asset balance is less than zero or if the position cannot be liquidated.

GRVT’s Insurance Funds will take over bankrupt positions, covering the losses and retaining any profits generated from these positions.