The new structure increases loss coverage per contract by over 200% and features automated thresholds and real-time monitoring. Bybit is upgrading its insurance fund system to reduce the frequency of Auto-Deleveraging events and offer stronger protection during high volatility, according to a Tuesday announcement. The structure aims to increase loss-absorption capacity by over 200%, effectively reducing the risk of ADL activation.
The rollout will extend to eligible trading pairs over about two months. Traders can monitor insurance fund data via API, while Bybit maintains the ability to intervene by adjusting thresholds or injecting capital during extreme market events. Bybit has introduced a revamped set of insurance funds to bolster loss absorption and reduce Auto-Deleveraging (ADL) risk during extreme market volatility.
The changes aim to lift loss-absorption capacity by over 200% and limit ADL activation, with rollout to eligible pairs over about two months. The system is designed to reduce the frequency of Auto-Deleveraging events and provide stronger protection during high volatility, enhancing risk management for users of USDT perpetual contracts. This move could influence traders’ risk strategies by offering improved protection during sharp price moves, as the phased rollout seeks to balance risk and accessibility amid evolving market conditions.
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