> ## Documentation Index
> Fetch the complete documentation index at: https://help.arcus.xyz/llms.txt
> Use this file to discover all available pages before exploring further.

# Are there socialized losses?

Arcus is designed to avoid them, through the insurance fund and ADL.

In normal operation, solvent traders aren't exposed to others' losses. In extreme conditions where both the fund and book liquidity are exhausted, ADL absorbs the residual against the highest-ranked profitable counterparties - a structured mechanism, not pro-rata socialization across all accounts.