Lista Lending Risk Fund

Lista DAO Risk Fund

Risk Fund address: 0x618579671f4B5a96Ff6Ac3Fb66224df39Ce9d325

Overview

The Lista DAO Risk Fund is a dedicated reserve designed to enhance the security and resilience of the Lista Lending ecosystem.

By allocating 50% of the revenue generated from Lista DAO’s self created vaults under Lista Lending, the fund serves as a financial buffer to protect users against potential losses resulting from exploits or unforeseen incidents within Lista’s self-operated Vaults.

Note: Vaults that are not managed/created by Lista DAO are NOT included in this benefit

Purpose of the Fund

The primary objective of the Lista DAO Risk Fund is to safeguard users by providing a mechanism to cover financial losses in the event of a security exploit or other critical incidents affecting Lista DAO’s Lending Vaults. Specifically, the fund is used to:

• Compensate Users for Losses: In the case of a verified exploit or blackswan events leading to users’ loss of funds within Lista DAO’s vaults, the fund will be utilized to repay affected users, ensuring fair and timely restitution. This includes Liquidation losses, bad debt and any other potential risks that may occur to the Vaults created by Lista DAO.

• Strengthen Protocol Resilience: By maintaining a robust reserve, the fund mitigates systemic risks, enhancing the overall stability of the Lista Lending platform.

Funding Mechanism

The Risk Fund is sustained through a consistent revenue allocation from Lista’s self-operated Vaults:

• Source: Half of the management fee charged on Lista’s self-operated Vaults is directed towards the Risk Fund.

• Fee Structure: The Vaults charge a total management fee of 10%, where half, which is 5%, is allocated to the Risk Fund.

• Frequency: Contributions to the fund are made continuously as management fees are collected, ensuring steady growth of the reserve.

This allocation strategy balances protocol profitability with user protection, leveraging Lista’s operational revenue to build a sustainable safety net.

Management and Governance

The Risk Fund is centrally managed by the Lista DAO Foundation to ensure transparency, efficiency, and accountability:

• Oversight: The Lista DAO core team will be responsible for the fund’s administration, including its allocation and deployment.

• Usage Conditions: The fund is activated only in the event of a confirmed exploit or incident resulting in verifiable user losses. Clear criteria and processes for fund disbursement are established to ensure fair and equitable compensation.

Operational Details

• Scope: The fund covers losses specifically related to exploits or security breaches within Lista’s self-operated Vaults. It does not extend to losses from market volatility, user errors, or external protocol risks.

• Disbursement Process: Upon confirmation of an exploit, the Lista DAO core team will assess the scope of losses, verify affected users, and execute repayments from the fund. The process prioritizes speed and fairness, with clear communication to the community.

• Fund Security: The fund’s assets are held in secure, multi-signature wallets managed by the Lista DAO Foundation, with strict access controls to prevent unauthorized use.