Futureswap V4 was built from the ground up with economic safety in mind. A true DeFi building block cannot have insolvency cases. The traditional insurance fund model which leads to centralization of power and potential insolvency needs to be re-examined.
Instead of having a shared insurance fund that brings significant limitations and attack scenarios unto itself, the Futureswap protocol has taken another approach that exercises ADL (auto-deleveraging) for the highest risk trades. Lower leverage trades have much less chance of receiving ADL compared to higher risk trades that will be forced closed first, usually at a much better price. This means that no insurance fund is necessary and the exchange will remain solvent in every scenario. Futureswap will continue to innovate on the insurance fund model over time.