What's Covered
Protection covers losses that originate within Lulo's integrated protocols. Coverage is enforced automatically by smart contracts, with no claims process, manual review, or off-chain approval required.
Covered Events
The following loss events are covered for Protected deposits:
- Smart contract exploits. A vulnerability in an integrated protocol's contracts is exploited, resulting in loss of deposited funds.
- Oracle failures. Price feed manipulation or malfunction causes a protocol to execute transactions at incorrect prices, leading to losses.
- Bad debt events. An integrated lending protocol accumulates bad debt that impairs depositor capital.
How Compensation Works
When a covered event occurs, Boost deposits absorb the loss before it reaches Protected capital. This happens automatically at the smart contract level. The system is designed to handle a total loss in any single integrated protocol, compensating Protected depositors in full as long as the coverage pool is sufficient.
Coverage health — the ratio of Boost capital to Protected capital — is monitored continuously and visible on-chain. This ratio determines the system's capacity to absorb losses, and you can verify it at any time.
Not Covered
Protection does not extend to systemic events outside the integrated protocol layer:
- Network outages. Solana or Ethereum downtime preventing transactions from executing.
- Stablecoin depegging. USDC, USDT, or other stablecoins losing their peg to the underlying fiat currency.
- Lulo contract vulnerabilities. Lulo has been audited 5 times and funds spend minimal time in Lulo's own contracts. But the coverage system does not cover Lulo's own infrastructure.
- Regulatory action. Government or regulatory intervention affecting protocol operations.
Verifying Coverage
All coverage mechanics are on-chain, so you can verify the current coverage ratio, the total Boost pool size, and the protection status of your deposit at any time. The rules are defined in audited, open-source contracts with nothing opaque about how they operate.