The insurance fund of Binance which protects its users from auto-deleverage liquidations on the Binance Futures platform used more than $13 million following the most recent crash in Bitcoin’s price. The exchange has stated that it intends to add $30 million more to the fund in order to keep protecting its traders.
Binance Futures continues to establish itself as a leading platform for Bitcoin and cryptocurrency derivatives trading.
Its insurance fund is designed to protect users in times of severe price volatility and auto-deleverage liquidations. Yesterday, Bitcoin lost about 20% of its value in less than 10 minutes as its price went from a little less than $10,000 to about $8,000 before recovering to its current trading levels.
During these times, Binance’s insurance fund spent about $13 million to protect users from liquidations. This is evident from the available funds on the fund according to the official website.
On May 10th, the fund had over $21 million worth of USDT available but on May 11th this number was dramatically reduced to $7.7 million.
In an official post, Binance shared on Twitter that they intend to inject an additional $30 million worth of the insurance fund “to both support and continue to protect our users.”
The importance of funds of the kind is incremental to the trading community. Bitcoin’s price is particularly volatile and 20% swings are not unusual. At times like these, it’s important to keep the proper mechanisms in place to protect traders.
Not only this, but solutions such as Binance’s Insurance Fund are also needed to establish the industry as one to which institutional investors can also turn their sight.
UPDATE: Binance has announced that it has injected the abovementioned $30 million into the insurance fund and the information on the official tracking page is updated every day at 00:00 AM (UTC).