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# Calculating Compensation

### How to Calculate Compensation?

• When you sign the insurance contract, the price of the IF/BNB pair will be fixed at the time of deposit. The loss rate will be calculated by:
LR = 1 - [ ( IF/BNB_withdrawal ) / ( IF/BNB_deposit ) ]
LR: Loss Rate
IF/BNB_deposit: Price IF/BNB when you deposit to the Vault
IF/BNB_withdrawal: Price IF/BNB when you withdraw your stake from the Vault
• Insurance Fund will compensate the number of tokens IF:
IF Compensation = LR * Number of IF Deposit * Compensation Rate
IF Compensation: Number of IF token you can claim from the Insurance Fund
Number of IF Deposit: Number of IF token you deposited to the Vault
Compensation Rate: The rate for claiming compensation
For Example:
You deposited 1000 IF to the Vault then signed an Insurance Contract
Your Lose Rate = 0.1 (10%)
Compensation Rate for LR ≤ 10% is 110%
=> IF Compensation = 0.1 * 1000 * 110% = 110 IF
You can fully withdraw a total of 1000 IF from the Vault then claim 110 IF from Insurance Fund. Totally you get back 1110 IF
• Compensation Rate is calculated according to the following:
0 < LR ≤ 10% -> Compensation Rate = 110%
10% < LR ≤ 99% -> Compensation Rate = 100%
• Notice: Compensation from Insurance Fund uses IF tokens and is calculated according to the IF/BNB price pair. In case you lose and Insurance Fund compensates you with IF tokens but you may still face a loss in USD value. An Insurance Contract may help you to reduce your loss but may not fully compensate the entire investment value in USD, so you should always consider and calculate carefully before your investment decision.