Imagine you're playing a high-stakes game at a casino, but there's a safety net in case you lose everything. An insurance fund, in the context of crypto exchanges, is like that safety net. It's a pool of money set aside by the exchange to cover any unexpected losses from leveraged trading. Leveraged trading is a risky practice where investors borrow money to make bigger bets. The insurance fund helps to prevent traders from going bankrupt if their bets go bad.
