as of 17/06/2023
Decentralized Finance (DeFi) is an innovative technology at the forefront of the financial world, but it's not without potential risks. To combat these, we've implemented a Safety Module as a protective measure.
The primary function of the Safety Module is to provide a safeguard against unforeseen fund losses within the protocol. It is designed to act as a buffer, absorbing the impact of any unexpected shortfall events that may occur within the protocol. In essence, it operates as an insurance mechanism, instilling an additional layer of security to the protocol.
Users are permitted to deposit a range of assets, including EGLD, sEGLD, BUSD, USDT, USDC, WETH, WBTC, UTK, and HTM. In return, they can earn safety incentives denominated in the HTM Token, which is procured using a part of the ecosystem's revenue. In the event of a shortfall, a portion of the funds housed in the Safety Module may be tapped to compensate for the losses incurred.
The Safety Module acts as a fortified barrier for the protocol. In the face of an unexpected deficit, a percentage of the staked liquidity could be reallocated to rectify the shortfall.
Several variables, such as those associated with smart contracts, Liquidations, and oracle failure, can result in unpredictable fund losses in DeFi protocols. The Safety Module has been designed specifically to address and mitigate these risks.
To provide a safety buffer, the Safety Module will initially have a pending cooldown period set at 30 days. This duration can be altered as needed through the Governance mechanism, providing flexibility and adaptability to changing circumstances.