# protection

## Overview

Gold-Backed Protection is BaseGold's opt-in insurance feature launching Q3 2026. It protects your Auto-Compound actions from execution failures, with claims paid in gold-backed VNXAU.

## How Protection Works

{% stepper %}
{% step %}

### Purchase Policy

Pay the premium in BGOLD tokens to activate coverage.
{% endstep %}

{% step %}

### Execute Protected Action

Run Auto-Compound with coverage active.
{% endstep %}

{% step %}

### Automatic Monitoring

The system tracks the execution status automatically.
{% endstep %}

{% step %}

### Claim on Failure

If execution fails, file a claim to receive compensation in VNXAU.
{% endstep %}
{% endstepper %}

## Protection Flow

{% @mermaid/diagram content="flowchart LR
A\[Buy Policy<br/>Pay BGOLD] --> B\[Protected Status<br/>Active]
B --> C{Execute<br/>Auto-Compound}
C -->|Success| D\[Normal Rewards<br/>No Claim Needed]
C -->|Failure| E\[File Claim]
E --> F{Solvency<br/>Check}
F -->|Sufficient Reserve| G\[Receive VNXAU<br/>Compensation]
F -->|Below Threshold| H\[Queue for<br/>Next Payout]" %}

## Key Features

| Feature          | Description             |
| ---------------- | ----------------------- |
| Premium Currency | BGOLD tokens            |
| Payout Currency  | VNXAU (gold-backed)     |
| Coverage Scope   | Execution failures only |
| Solvency Model   | Reserve-backed payouts  |
| Claim Process    | On-chain verification   |

## Solvency Mechanism

The Protection Reserve maintains a target solvency ratio:

| Solvency Level | Status   | Action             |
| -------------- | -------- | ------------------ |
| > 100%         | Healthy  | Normal operations  |
| 75-100%        | Warning  | Premium adjustment |
| < 75%          | Critical | Claims queued      |

## Protection Economics

{% @mermaid/diagram content="flowchart TB
subgraph Premiums\["Premium Collection"]
USER\[User Pays BGOLD]
RESERVE\[Protection Reserve]
end

```
subgraph Claims["Claim Distribution"]
    CLAIM[Verified Claim]
    VNXAU[VNXAU Payout]
end

USER --> RESERVE
CLAIM --> RESERVE
RESERVE --> VNXAU" %}
```

## Important Notes

{% hint style="info" %}

* Passive rewards unchanged — Your VNXAU reflections continue regardless of protection
* Execution failures only — Does not cover market losses or slippage
* Reserve transparency — Solvency gauge visible on dashboard
* Q3 2026 launch — Feature launching after token launch
  {% endhint %}


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://basegold.gitbook.io/basegold/features/protection.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.