Mutual Reserve Fund
How a small slice of every contribution protects the whole circle
A mutual reserve fund is the safety net behind a duti circle. Every round, a tiny percentage of each member's contribution flows into a shared pool. If a member can't pay, the pool covers their share so the circle keeps running — and no one else loses out. Add or remove defaulters below to see how many the pool can absorb.
100 members
Each contributes a base of $1,000 per round across a 100-round cycle.
Reserve rate
A fraction of every contribution (currently 0.50%) seeds the pool round after round.
Default protection
When members stop paying, the pool absorbs the shortfall — not their neighbors.
Pool capacity exceeded at 3 defaulters
With these settings the reserve runs dry and $17,458 would fall back on the remaining members. Increase the reserve rate, raise the deposit, or move a defaulter's round later to restore coverage.
Two ways to cover defaults — both paid by members
The reserve is members' own money, pooled in advance and refunded at cycle end. The trade-off is who pays, and when.
Either way, members are backing each other. Some prefer the reserve's predictability; others would rather pay only when defaults actually occur and save the premium if everyone makes it through.
Defaulters
Each member can stop paying at a different round.
100 members. Base contribution $1,000/round, escalating by the step amount each round. The security deposit collected from each member seeds the pool at round 0 — current seed: 100 × $1,000 = $100,000. Each defaulter stops paying at their own configured round, and the pool covers their share until it can't.
How to read the chart
Each line shows the pool balance at the end of every round under a different cumulative scenario: just defaulter 1, then 1+2, then 1+2+3, and so on. The flat line at the top is the ideal — no one defaults, and the reserve rate slowly grows the pool.
Add defaulters with the + button and drag each one's slider to change when they stop paying. A defaulter who leaves early hurts the pool more than one who leaves late, because there are fewer rounds of contribution from that member to absorb the loss.
The reserve fund isn't free — it's members' own money, pooled in advance. The two-column box above shows the trade-off: every member pays the reserve premium every cycle, no matter what. The pay-as-you-go column shows what the remaining members would have to chip in for the current default scenario if no fund existed. Some members will prefer the reserve's predictability; others will see it as backing strangers' defaults out of their own pocket.
Scenarios the pool can't fully cover are drawn as dashed lines that trace the balance until the moment it hits zero — then stop. The legend marks them with the round at which they drain, and the metric tile shows the uninsured shortfall. To restore coverage you can raise the reserve rate, increase the seed deposit, push a defaulter's round later, or remove one from the list.