Platform Participants

Sponsors (Lead Underwriters)

Sponsors act as the lead underwriters, responsible for creating and managing insurance pools. They must be accredited investors, such as:

• Layer 2 protocols offering insurance for staking and network activities.

• Institutions like asset managers and venture funds looking to mitigate risks.

• Liquid funds seeking to underwrite risks for competitive yields.

Sponsors define the coverage parameters, select the assets and risks to insure, and attract stakers through APYs. They play a vital role in sustaining the insurance ecosystem by managing capital effectively and ensuring coverage aligns with market needs.

Stakers (Liquidity Providers)

Stakers supply liquidity to insurance pools, backing the risks underwritten by sponsors. Any liquidity provider (LP) whether a retail investor or institution can participate, earning APY and Liquid Insurance Tokens (LITs). These LITs represent their stake in the pool and can be traded on secondary markets, giving stakers flexibility to exit or rebalance their positions. Stakers are not involved in governance, claims assessments, or investment decisions. Their role is focused solely on providing capital and earning passive income through pool participation.

Proposers (Insurance Buyers)

Proposers purchase insurance to protect their Bitcoin and DeFi positions from risks like slashing, bridge exploits, and stablecoin depegging. They can be retail investors, DeFi protocols, or institutions.

• Retail users securing personal Bitcoin holdings.

• Protocols ensuring liquidity pools or staking activities.

• Institutions managing large-scale risk exposure within Bitcoin L2 networks.

By paying premiums, proposers help maintain the sustainability of insurance pools and benefit from tailored coverage aligned with their specific needs.

Risk Assessment DAO

The Risk Assessment DAO plays a key role in governance and claims processing. It consists of security experts and risk analysts who manage claim evaluations and oversee key decisions related to risk assessment. This decentralized body ensures that claims are handled fairly and transparently, with an incentive-driven model that rewards accurate assessments.