Insurance Fund

Detailing the coverage and strategy of the Parallel Insurance Fund

Summary

Introduced with MIP-28┃Ratify the Parallel Insurance Fund and updated with PGP-31 | Update Insurance Fund Strategy the Insurance Fund is covering losses in case of shortfall events:

• Smart contract risk: Risk of a bug, design flaw or potential attack surfaces on the smart contract layer.

• Liquidation risk: Risk of failure of an asset that is being used as collateral on Parallel; risk of liquidators not capturing liquidation opportunities in a timely manner, or low market liquidity of the principal asset to be repaid.

• 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.

Rules

The DAO must decide, via governance votes, which deployment is covered, which chain is covered, or not, by the insurance fund, and at which % or $ value of the insurance fund the deployment & chain are covered.

Assets held in the insurance fund must be liquid under a 16 weeks period.

For Parallel V2: At least 10k PAR for PAR deployments and 1k paUSD for paUSD deployments must stay in the vaultsCore to cover very short term potential bad debts.

DAO Multisig signers will have the right to rebalance assets from the deployed insurance fund to vaultsCore contracts in order to always have enough assets to cover very short term bad debts.

The DAO approved to cover Parallel V2 with PAR & paUSD deployment on Ethereum and Polygon PoS; Parallel V3 with USDp deployment on Ethereum, Base, Sonic & HyperEVM; and PRL token on Ethereum, Arbitrum, Optimism, Base, Sonic & Polygon PoS. All this to up to 100% of the insurance fund.

Insurance Fund Assets

Ethereum

Multisig	Address
Insurance Fund Multisig	0x6aF71a3723D3c0Ed69f84EE259c9De3019C2a77c
VaultsCore - PAR (only PAR in the contract)	0x173ae6283a717b6cdd5491eac5f82c082a8c674b
VaultsCore - paUSD (only paUSD in the contract)	0xE26348D30694aa7E879b9335252362Df3df93204

Polygon PoS

Multisig	Address
Insurance Fund Multisig	0x6aF71a3723D3c0Ed69f84EE259c9De3019C2a77c
VaultsCore - PAR (only PAR in the contract)	0x0a9202c6417a7b6b166e7f7fe2719b09261b400f
VaultsCore - paUSD (only paUSD in the contract)	0xcABAbC1Feb7C5298F69B635099D75975aD5E6e5f

HyperEVM

Multisig	Address
Insurance Fund Multisig	0x5826be671E80d5546f04886e3Fe19d4750201A99

Sonic

Multisig	Address
Insurance Fund Multisig	0x6aF71a3723D3c0Ed69f84EE259c9De3019C2a77c

Base

Multisig	Address
Insurance Fund Multisig	0x6aF71a3723D3c0Ed69f84EE259c9De3019C2a77c

Strategy

• General:

  • Accumulated PAR/paUSD/USDp/USDC: Swapped to USDp and deposited into liquidity pools (DEX/Lending protocols), decided by DAO Multisig Signers with advice from Cooper Labs & Mimo Labs

• Ethereum:

  • PAR VaultsCore contract: 10,000.00 PAR

  • paUSD VaultsCore contract: 1,000.00 paUSD

  • vlAURA: 1,113,709.10

  • Aura-ECLP-PAR-EURA: 25,000.00 PAR

  • Aura-ECLP-paUSD-GYD: 25,000.00 paUSD

• Polygon PoS:

  • PAR VaultsCore contract: 10,000.00 PAR

  • paUSD VaultsCore contract: 1,000.00 paUSD

  • Aura-ECLP-PAR-EURe: 25,000.00 PAR

  • Aura-ECLP-paUSD-stataUSDCn: 25,000.00 paUSD

Accumulated rewards from Aura & Balancer deposits would be swapped every 16 weeks for AURA tokens then locked as vlAURA for 16 weeks on Aura. vlAURA voting power will continue to be delegated to Mimo Labs, as voted previously.

Accumulated rewards from other potential deposits in DEX/Lending protocols will be swapped for USDp.