> For the complete documentation index, see [llms.txt](https://torch-1.gitbook.io/litepaper/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://torch-1.gitbook.io/litepaper/reserve-management.md).

# Reserve management

To keep the system adaptive and rewarding high-quality predictions while preventing unsustainable reward inflation or reserve depletion, the following strategy is used:

* At launch, each token sets a Target Level of reserve funds, aimed at maintaining payout models sustainable. It will be set to $1M at project launch for blue chip tokens.
* As betting activity grows, the reserve funds are accumulated until reaching its Target Level from lost bets. Anything above is subject to payout as a reserve bonus. A healthy balance is when Reserve Bonus is <20% of the total payout on average.
* Torch continuously monitors historical betting data, tracking Prediction Quality scores and actual outcomes, and reserve funds impact. These statistics inform dynamic tuning of Lead Time, Boldness, and Sharpness configs and weights, as well as Scaling Factor, to maintain a stable Target Level of the reserve.


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