# 💰Insurance Fund

We make the best effort to make WOWswap as safe as possible for everyone, but in case of a black swan event some trades theoretically can be liquidated too late, so to mitigate possible losses for liquidity providers the protocol builds up the insurance fund, which receives 2.5% of every swap’s net profit.

If a token’s price drops significantly below the liquidation price of a particular swap, then, after liquidating this swap, the liquidity pool might incur a loss. Since token prices can change dramatically as a result of one sale transaction or within one block, it is technically impossible to liquidate all leveraged trading positions without losses.&#x20;

Therefore, WOWswap protocol created an internal insurance fund, which receives a small portion of profit from every profitable leveraged swap and uses these funds to cover losses caused by certain liquidated swaps.&#x20;