Reserve Fund

​

Overview

Tori maintains a reserve fund for extraordinary circumstances: a buffer for events that fall outside normal operations, funded by protocol revenue and held apart from both the backing assets and operational funds.

​

Normal drawdowns vs extraordinary events

The reserve fund is not a smoothing mechanism, and the distinction matters: Delta-neutral positions hold offsetting legs that converge over time, so they can show paper losses during market stress and resolve as conditions normalize. That is expected behavior, and it does not touch the reserve fund. The fund is preserved for what the strategies were never built to absorb: a counterparty failing unexpectedly, a market dislocation beyond historical stress parameters, or an operational emergency that needs capital to resolve.

​

Funding and management

The fund is invested conservatively in highly liquid assets so it can be drawn on quickly when needed, kept segregated from operational funds, and included in the Proof of Reserves attestations published by Accountable. Its current size and coverage ratio can be checked there at any time.

​

Deployment

The decision to deploy reserve capital is made by the protocol team through the timelocked admin roles documented in Roles, Multisig and Timelocks, following established guidelines and thresholds. Normal strategy fluctuations do not trigger deployment.

​

What it is, and what it is not

The fund has a finite size, disclosed in the attestations. It is a protocol-managed buffer, not third-party insurance. And it is one protective layer among several: diversified strategies, position and portfolio risk limits, and professional management all sit in front of it. It is also not part of the trading book. Backing assets support trUSD’s value and sit in active positions; the reserve fund sits aside, untouched until something extraordinary happens. Both are attested.

​

Next steps