Asset Reserve Fund (ARF)
The Asset Reserve Fund (ARF) is Lendr’s capital buffer—standing ready to absorb unexpected shocks such as custodian failure, hedge slippage, or oracle malfunction..
1 Target Size
3 % of total protocol TVL (aggregated across all chains).
Held in highly liquid USDL / USDC so it can be deployed instantly.
2 How the ARF Is Funded
Performance fees
10 % of every vault’s positive P&L
Auto‑routed by the FeeRouter until the 3 % cap is reached.
Emergency LNDR swap
Governance‑approved only
If ARF falls below 1 % TVL after a payout, xLNDR holders can authorize a temporary LNDR‑to‑USDL auction to recapitalize.
When the ARF ≥ 3 % TVL, its 10 % fee share is re‑routed to xLNDR stakers; it re‑activates automatically if the balance dips below target.
3 When the ARF Can Be Used
Custodian default
Verified asset shortfall after audit
Multisig releases funds to the affected vault.
Hedge loss > draw‑down limit
Vault draw‑down exceeds its maxDrawdown and governance vote passes
ARF tops up the vault to restore NAV.
Smart‑contract exploit
Confirmed exploit & independent audit
Emergency payout after a 48 h timelock.
A super‑majority Snapshot vote (≥ 66 % LNDR quorum) is required for any ARF withdrawal.
4 Transparency & Oversight
On‑chain addresses —
0xArf…(per chain) visible in real time.Monthly report — balance, inflows, outflows and scenario stress‑tests.
Auditability — ARF contract included in every external security audit.
5 Replenishment & Growth
If a payout reduces the ARF below its 3 % TVL target:
The 10 % performance‑fee share automatically resumes flowing to the ARF.
Governance may temporarily direct all fees to the ARF until the target is restored.
As a last resort, xLNDR can approve an LNDR‑for‑USDL sale to recapitalize the fund.
Goal: protect user balances first, with minimal dilution to fee shareholders.
In Short
The Asset Reserve Fund provides a clear, on‑chain safety net so that unforeseen losses are covered by the protocol—not by individual depositors.
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