Scope of Coverage
The Guardian Fund is designed to provide protocol-native remediation for a defined set of adverse events that may impact users of Radiant Capital. This page outlines the categories of events that may be eligible for coverage, the scope of protection, and important limitations.
The Guardian Fund is intended to mitigate protocol-level risks, not individual user errors or market-driven losses. Coverage applies to Core Markets, RIZ Isolated Markets, Vaults, Strategies, however explicitly excludes RIZ isolated markets in some categories.
Covered events generally fall into the categories below.
Smart Contract Exploits and Hacks
Description
Smart contract exploits refer to unintended vulnerabilities or logic flaws in Radiant protocol smart contracts that result in loss of user funds.
Examples include:
Re-entrancy vulnerabilities
Incorrect accounting or rounding errors
Permission or access control failures
Faulty upgrade or initialization logic
Exploits arising from unexpected contract interactions
Coverage Intent
If a verified exploit of Radiant Core contracts results in user fund loss, the Guardian Fund may be used to remediate affected users.
Exclusions
Exploits in third-party protocols integrated by Radiant
Exploits in dependencies widely used across the industry
User-deployed vaults or custom strategies
Known risks disclosed prior to the event
Severe Oracle Failures or Manipulation
Description
Oracle failures occur when price feeds used by the protocol provide incorrect, delayed, or manipulated data that materially impacts protocol operations.
Examples include:
Manipulation of on-chain price sources
Incorrect asset pricing due to feed configuration errors
Cross-market price desynchronization
Coverage Intent
If an oracle failure directly causes incorrect liquidations, bad debt, or user losses, the Guardian Fund may be used for remediation.
Exclusions
Normal price volatility
Extreme oracle latency or downtime
Temporary oracle deviations that self-correct without loss
Oracle issues in RIZ isolated markets, other than Chainlink or Pyth
Custodian Risks and Operational Failures
Description
Custodian risks relate to failures or compromises involving protocol-controlled infrastructure or privileged actors.
Examples include:
Compromise of Radiant contributor wallets
Key mismanagement or signer compromise
Failures in DAO-controlled operational systems
Multisig execution errors
Coverage Intent
If such failures result in direct loss of user funds, the Guardian Fund may be used to remediate affected users.
Exclusions
Losses caused by individual user wallet compromise
Losses caused by incorrect approvals
Social engineering or phishing targeting users
Liquidation Failures (Core Markets Only)
Description
Liquidation failures occur when the protocol’s liquidation mechanisms fail to operate as intended during periods of market stress.
Examples include:
Insufficient liquidator participation
Network congestion preventing timely liquidations
Incorrect liquidation parameters
Liquidation logic failures
Coverage Intent
If liquidation failures in Core Markets result in systemic losses or unfair user impact, the Guardian Fund may be used to remediate affected positions.
Exclusions
Liquidation failures in RIZ isolated markets
Losses due to extreme but expected market volatility (such as delistings)
Bad Debt (Core Markets Only)
Description
Bad debt arises when borrower positions cannot be liquidated profitably, resulting in a shortfall that impacts lenders or the protocol.
Examples include:
Rapid price collapses exceeding liquidation thresholds
Failed or partial liquidations
Coverage Intent
The Guardian Fund may be used to cover protocol-level bad debt in Core Markets to protect lenders and maintain market solvency.
Exclusions
Bad debt in RIZ isolated markets
Covered vs Not Covered
Smart contract exploits
✅
—
Oracle manipulation
✅
—
Custodian / signer compromise
✅
—
Liquidation failures
✅
RIZ isolated markets
Bad debt
✅
RIZ isolated markets
User error or misuse
—
❌
Market volatility / price movements
—
❌
Third-party protocol failures
—
❌
Dependencies
—
❌
Impermanent loss
—
❌
MEV or gas-related losses
—
❌
Severity Thresholds & Partial Coverage
The Guardian Fund is designed to respond to material protocol-level incidents rather than minor or transient issues.
Severity Thresholds
Coverage eligibility generally depends on factors such as:
The magnitude of user losses
Whether the event results in protocol insolvency or systemic risk
The number of affected users
Whether normal protocol mechanisms can self-correct the issue
Minor incidents that do not threaten protocol solvency or materially impact users may not trigger Guardian Fund remediation.
Partial Coverage
In some cases, remediation may be partial rather than full, depending on:
Available assets in the Guardian Fund
The scale of losses relative to fund capacity
Governance-approved payout limits
Risk parameters in effect at the time of the event
Partial remediation distributes available capital in the Guardian Fund proportionally among eligible users. Any remediation event results in a corresponding reduction in Guardian Fund assets and gLP value.
Numerical Examples
Example 1: Full Coverage
Total Guardian Fund assets: $1M
Eligible user losses: $200k
Outcome: Users are fully remediated. Guardian Fund assets decrease to $800k. gLP price declines proportionally via slashing.
Example 2: Partial Coverage
Total Guardian Fund assets: $1M
Eligible user losses: $2M
Outcome: 50% of losses are remediated pro-rata. Guardian Fund assets are fully depleted. gLP holders fully absorb the loss via slashing.
Hard vs Soft Triggers
Covered events may trigger remediation through either hard (automatic) or soft (governance-reviewed) processes.
Hard Triggers (Automatic)
Hard triggers are predefined, objective conditions that may automatically initiate remediation logic, such as:
Verified smart contract exploit in Radiant Core contracts
Deterministic oracle failure with measurable loss impact
Critical liquidation mechanism failure
Hard triggers are designed to minimize response time and reduce governance overhead during emergencies.
Soft Triggers (Governance-Reviewed)
Soft triggers require explicit review and approval by the Radiant DAO governance framework. Examples include:
Custodian or signer compromise
Cross-chain infrastructure failures
Ambiguous or multi-causal loss events
Soft triggers allow for contextual assessment, forensic analysis, and tailored remediation decisions.
Events Explicitly Not Covered
The Guardian Fund does not provide coverage for:
User error (incorrect transactions, leverage misuse)
Market risk or asset price volatility
Impermanent loss
Some losses in RIZ isolated markets
Third-party protocol failures unrelated to Radiant
Third-party dependencies widely used by the industry
Gas fee losses or MEV-related effects
Remediation Process (High-Level)
Event detection and incident analysis
Scope and impact assessment
Automated or DAO-approved remediation decision
Distribution of assets from the Guardian Fund
Corresponding gLP slashing
Remediation amounts are partial and subject to Guardian Fund capacity.
Important Notes
Coverage is best-effort, not guaranteed.
The Guardian Fund does not constitute insurance.
All coverage decisions are ultimately governed by Radiant DAO processes
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