Reserve Fund

Reserve Fund Emergency Use

The Reserve Fund serves as a final safety mechanism within the Sigma Money protocol. It is designed to cover bad debt only when all other protection layers—including rebalancing and liquidation—fail to resolve the shortfall.

When is it triggered?

• The Reserve Fund is only activated after both rebalancing and liquidation mechanisms have been exhausted and there remains unresolved under-collateralized debt.

• At this stage, manual intervention is required.

Who handles it?

• Initially, the Sigma Money core team will assess and respond to the incident.

• In the future, this responsibility will transition to the Sigma DAO, once it is fully established.

At present, any emergency action will be taken in the best interest of protocol integrity and user capital protection, with full transparency and post-event reporting.

This structure ensures that even in edge-case scenarios, the protocol has a clear path to recovery and user protection remains a top priority.