Full User Compensation

Definition ∞ Full user compensation refers to the complete reimbursement of funds or assets lost by users due to security breaches, operational failures, or other adverse events on a digital asset platform. This commitment ensures that affected individuals are made whole, covering the entire value of their lost holdings. It often relies on insurance funds or company reserves.
Context ∞ The issue of full user compensation frequently arises following hacks or insolvencies within the cryptocurrency sector, becoming a central point of debate regarding platform accountability and user protection. Companies that offer full compensation often gain a significant trust advantage, while those that do not face severe reputational damage and legal challenges. This practice is crucial for maintaining confidence in digital asset services.