> For the complete documentation index, see [llms.txt](https://onchaintrade.gitbook.io/ot/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://onchaintrade.gitbook.io/ot/perpetuals-trading/insurance-pool.md). # Insurance Pool 40% of perps trading fee, perps funding fee and 100% of perps liquidation fee goes to insurance pool. Funds collected by insurance pool will be used to compensate liquidity providers in case net loss happens to LPs during drastic market fluctuations. Perpetual swap is a 0 sum game between long and short traders. Gain for one side comes from the loss of the opposite direction traders, whenever there is an imbalance between long and short OI(opening interest), there is a possibility of imbalance between PnL(Long) and PnL(Short) during drastic market fluctuations. In perfect conditions when PnL(Long) + PnL(Short)<= 0, there is a net gain for the protocol(and liquidity providers). However when PnL(Long) + PnL(Short)>0, which means there is a shortfall to pay traders' net profit, this shortfall has to be paid by Insurance pool --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://onchaintrade.gitbook.io/ot/perpetuals-trading/insurance-pool.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.