Tortle Relief Fund is still in development as an idea. This paper should be considered as DRAFT.
On DeFi shit just happens, technical bugs, exploits, and economical attacks plague the environment, making a lot of people losing not only their assets but their confidence in the ecosystem. Therefore, we wanted to create what we call Tortle Relief Fund.
When you finish a transaction in Tortle, we will add a percentage of the extra fee that will go straight to the fund. In case some users lose funds cause of an issue in Tortle, the fund will be activated and will try to return the funds.
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.
How it works
A significant part of Tortle incentives Tokens will go to create this fund. Additional users can adquire stake Tortle on Dojos to adquire Tortle Catbonds. Tortle CatBonds are adquired with TORTLEs and go to the fund. Tortle CatBonds have different expiration dates, from 3 months to 1 year, after that period 50% of insurance fees on that period will be shared with the Tortle Catbonds holders, depending on their percentage on the Fund, the rest will be to increase Tortle Relief Fund teasury
If the fund has a total of U$1,000,00.00 and some user buys TortleCatBonds worth U$1,000,00.00 and the users apply for insurance paying $1,000,000 on fees after the period of maturation the Tortle CatBond holders will receive $500.000, .
Every time a user wants to get some insurance on a Tortle Combo Recipe we will calculate 2 items:
The composition of the operation in terms of LP/Farms and assets involved.
The amount of the Recipe.
Every Pool or Farm will have a rating calculated on public formula and later manually curated by an analyst (to avoid exploits on the formula). The formula will be upgraded over time and will always be public.
The total sum insured could get bigger than the total amount on the fund. In that case, we will inform the user of the percentage of coverage we can assure. If our actual funds only can give the total amount of users a 50% of their funds, we will inform them, as the market conditions change over time, once we cannot assure that we can cover the 100% the percentage will be expressed variably (for example 35%-45%). In those cases, we will link more Tortle Cat Bonds to achieve 100% of coverage on all our users.
To mitigate risk we will create more than one fund depending on the rating of the assets, so better assets and pools don't get affected in case some other fail.
Tortle Cat Bonds
New Tortle Dojos and new Tortle Cat Bonds will be available every time the max insured quantity is in use. When we got a 75% of our fund already in use covering our users, Tortle Catbonds will be available to buy. Tortle Cat Bonds has a minimum APR and a maturation period. The minimum APR will be paid as soon as the bond is sold and the rest at the end of the maturation period.
Tortle Cat Bonds work in a similar way to LP Token, and you can even redeem it before the maturation period with a discount.
In case there is a catastrophic event, Cat Bond investors will lose a part of their principal to the insured users. All Cat Bond investors will lose, and a part of their principal depends on the maturation of their bonds. In extreme cases, investors will lose all their funds.
We are working on another bond called Tortle Reinsurance. Assuming our Fund got depleted by a catastrophic event and the fund got depleted. Reinsurance Fund will only be activated when insurance fails, so it is a low-risk investment. The 25% of the insurance fees will be converted into Stablecoins, and offered to the Reinsurance bonds holders, who will deposit their Tortle Tokens there in exchange.
Once we have located what we call a catastrophic event, an event that affects more than X users and has a significant impact on the viability of any other Fantom Ecosystem project we will automatically refund all Tortle users that lost funds
Defining a catastrophic event is kind of tricky always, and we are actually working on a consistent definition, but by average.