> For the complete documentation index, see [llms.txt](https://nebula-18.gitbook.io/nebula/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://nebula-18.gitbook.io/nebula/tech-overview/nebula-technology-overview/risk-management-and-security/insurance-fund.md).

# Insurance Fund

Nebula maintains an insurance fund to protect users from unexpected losses.

#### **Risk Mitigation Reserve**

The insurance fund accumulates resources from:

* A portion of protocol fees
* Liquidation penalties

It acts as a financial buffer against unforeseen events, such as smart contract exploits or extreme market volatility.

#### **User Protection**

In significant loss events, the insurance fund compensates affected users, enhancing confidence in the protocol’s safety measures.