# Risk Fund Bad debt can occur when liquidators fail to function properly despite liquidation incentives. This failure can lead to under-collateralization, where the collateral value does not cover the borrowed amount, resulting in bad debt. To address this issue, Evoq allocates a portion of the protocol reserve to a risk fund. This fund is designed to cover unexpected losses, ensuring the protocol remains stable and users are protected from financial losses. In this way, it helps maintain the health and reliability of Evoq. --- # 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://docs.evoq.finance/protocol-overview/risk-fund.md?ask= ``` 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.