[Important] Bybit introduces enhanced insurance fund mechanism for Perpetual Contracts

To improve users' trading experience and reduce unnecessary Auto-Deleveraging (ADL) events during high volatility, Bybit is rolling out an updated insurance fund mechanism. This update introduces 2 specialized Insurance Fund Pools:

- New Listing Insurance Fund Pool: For newly-listed USDT Perpetual Contracts

- Portfolio Insurance Fund Pool: For groups of contracts with correlated volatility or shared liquidity sources

These dedicated pools provide more targeted protection for different contract types and strengthen overall risk management. Compared to the previous system of standalone funds, this new structure boosts the average loss-absorption capacity per contract by over 200%, significantly lowering the risk of unnecessary ADL triggers.

The rollout begins on Dec 19, 2025, and will gradually apply to eligible trading pairs over approximately 2 months.

Insurance Fund Pool overview

If an Insurance Fund Pool balance drops significantly and a single trading pair's 8-hour drawdown exceeds the set threshold, the system will automatically trigger the ADL protection mechanism.

Starting Dec 19, 2025, traders can monitor the next-day's (T+1) insurance fund balances and real-time drawdown ratios via the [API interface](https://bybit-exchange.github.io/docs/v5/market/adl-alert) and [here](https://bybit-exchange.github.io/docs/v5/websocket/public/adl-alert). During extreme market conditions — such as sudden liquidity shocks, abnormal price dislocations, or widespread volatility — Bybit reserves the right to adjust the ADL thresholds or manually add funds to the Insurance Fund Pool to provide additional protection.

Observation and migration process

All contracts in these pools undergo continuous monitoring based on key metrics, including open interest, risk exposure, liquidity depth, volatility patterns, trading volume and underlying project fundamentals.

- New listings: Typically placed in the New Listing Insurance Fund Pool for an initial observation period of about 30 days. This pool receives higher capital allocation to provide extra protection during the volatile post-listing phase.

- Portfolio contracts: Monitored continuously within grouped portfolios to manage correlated risks.

Based on these assessments:

- Contracts from the New Listing Insurance Fund Pool may migrate to the Main Insurance Fund Pool or an appropriate Portfolio Insurance Fund Pool after the observation period.

- Portfolio Insurance Fund Pool contracts may be reassigned to a different portfolio group or moved to the Main Insurance Fund Pool as needed.

For more information and data about Bybit Insurance Fund Pool and ADL mechanism, please visit [here](https://www.bybit.com/en/announcement-info/insurance-fund/).

If you have any questions, please feel free to contact our [Customer Support](link to https://www.bybit.com/en/help-center/s/webform).