Tortle Relief Fund
Tortle Relief Fund is still an idea that is being expanded on. This section should be considered as a DRAFT.
On DeFi, shit just happens. Technical bugs, exploits, and economic attacks plague the environment, making a lot of people lose not only their assets but their confidence in the ecosystem. For that, we wanted to create what we call the Tortle Relief Fund.
When you finish a transaction on Tortle Ninja, we will ask you for an insurance fee that goes straight into the fund. In the event that some users lose funds because of an issue on Tortle Ninja, all the insurance fees you've accumulated will be returned to you.
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 part of Tortle's incentive tokens called Tortle CatBonds will go to create this fund. Staking Tortle on Dojos will give users Tortle CatBonds. They have different expiration dates, from 3 months to 1 year. 50% of insurance fees during that period will be shared with other Tortle CatBonds holders depending on their percentage on the fund. The rest will be allocated to the Tortle Relief Fund treasury.
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.
- How much the recipe actually makes.
Every Pool or Farm will have a rating that is calculated through a formula available to the public. It will be manually curated later on by an analyst to avoid exploits. The formula will be updated over time.
The total sum insured has the potential to be larger than the entire fund. In case that happens, we will inform our users if our funds can only partially cover their insurance fees. The market conditions change over time, and we cannot assure that we can cover them 100%. The partial coverage will be expressed in percentage (35-45% as an example). Still, we will try to link more Tortle CatBonds to try and achieve 100% coverage for all our users.
To mitigate risks, we will create more than one fund depending on how well the assets do. This means that highly-rated assets and pools won't get affected just in case others fail.
New Tortle Dojos and Tortle CatBonds will be available every time the max insured quantity is in use. When 75% of our fund has been utilized to cover our users, Tortle Catbonds will be available to buy. Tortle CatBonds has a minimum 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 in a similar way to LP Tokens, and you can even redeem them before the maturation period with a discount.
In case of a catastrophic event, CatBond investors will lose a part of their principal to the insured users. How much they lose depends on the maturation of their bonds. In the most extreme cases, investors will lose all of their funds.
We are working on another bond called Tortle Reinsurance, and it applies when our funds get depleted by a catastrophic event. The Reinsurance fund will only be activated when insurance fails, so it is a low-risk investment. 25% of the insurance fees will be converted into Stablecoins and offered to Reinsurance bondholders, who will deposit their Tortle Tokens there in exchange.
It's always tricky to define what a catastrophic event is, but in this context, it's an event that affects many users and has a significant impact on the viability of any other project on the Fantom ecosystem. If this happens to Tortle, we will automatically refund our users all of their lost funds.