SuiPad Shield is a feature that provides protection to carefully selected and ambitious crypto projects, while also ensuring that SuiPad investors are safeguarded against token dumps. Investing in launchpad IDOs can be rewarding, but it also involves risks. SuiPad Shield was introduced to protect participants' principal capital, giving them peace of mind.

In the current market, most launchpads and IDO platforms do not have any measures in place to protect users' principal capital against volatility when investing in newer crypto projects. This makes it a high-risk activity for IDO participants. At SuiPad, an insurance feature has been engineered to protect users' principal capital. For instance, when a user buys the IDO round of a launchpad project, they can choose to add 15% of their invested funds to purchase insurance.

The insurance fee is sent to the SuiPad Shield Pool, which covers any potential loss of the user's principal capital for the next 7 days. On the 7th day since the IDO launch, if the average peak price is lower than the IDO price, the SuiPad Shield Pool will cover the difference to the user, so the user's principal capital is protected. If the project does well, the user's return will be infinity% minus 15% paid in insurance costs.

The insurance protocol mechanism works in the following way: Launchpad participants can decide if they want to purchase SuiPad Shield, and all the insurance fee goes directly to the insurance pool. The fund will be used to repay the loss of IDO investment. After 7 days, the DAO will calculate the average peak price of 7 days (UTC+0). If the average peak price dropped below the IDO price, the difference will be covered. If the insurance pool does not have enough funds to repay the debt, funds raised from the project IDO will be used. If the insurance pool is not utilized, it will be accumulated for subsequent launches.

For example, let's consider the ABC project with an IDO price of $1, an allocation size of 500 USDC, and an insurance fee of 75 USDC (15% of the allocation size). The 75 USDC will go into the insurance pool. After the IDO, the average peak price of ABC after 7 days is $0.7. Therefore, the SuiPad Shield is activated, and (($1 - $0.7) * 500 USDC) = 150 USDC is claimable.