Community Insurance Module (Coming Soon)
Aside from its governance function, $TONIC can also be utilized to secure the protocol through the Community Insurance module. This module is designed to function as a line of defense for the protocol against any shortfall events.
Users participating in this module have the options to either stake or lock their $TONIC to generate additional yield.
  • Staking: Users can stake & unstake anytime (no time bonding) and receive a portion of fees gathered from the Tectonic protocol
  • Locking: Users can lock their tonic for minimum period of 90 days, to a portion of fees gathered from the Tectonic protocol, plus some additional staking yield
However, their staked / locked position may be subjected to a slashing up to a certain portion in the event of short-fall events happening. Shortfall events may include the following occurrence, and will be further defined by Tectonic governance.
  • Smart contract risk: Risk of design flaw, bug, or any potential attack to Tectonic’s smart contract
  • Liquidation / solvency risk: Extremely low market liquidity or general failure on the collateral assets to be liquidated or principal assets to be repaid, causing significant under collateralization and bad debts.
  • Oracle failure risk: Risk of the Oracle system not properly updating the prices in case of extreme market downturn and network congestion; risk of the Oracle system not properly submitting prices, causing improper liquidations.
When the staking pool is used to cover for a shortfall, the amount of staked $TONIC deducted from each user will be distributed proportionally. The maximum slashing is initially set at 30% but can be adjusted as part of the governance process as the protocol matures.
Further detail on the percentage of protocol’s fees to be distributed back, staking yield, and slashing mechanism for the Community Insurance module will be released closer to the launch of the module.
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