Platform Participants

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Sponsors (Primary Underwriters) Sponsors serve as the primary underwriters, tasked with establishing and overseeing insurance pools. They are required to be accredited investors, which may include:

• Layer 2 protocols providing insurance for staking and network operations.

• Entities such as asset managers and venture capital firms aiming to reduce risks.

• Liquid funds interested in underwriting risks to achieve attractive returns. Sponsors set the terms of coverage, choose the assets and risks to insure, and entice stakers with appealing annual percentage yields (APYs). They are essential to the insurance ecosystem, ensuring efficient capital management and aligning coverage with market demands.

Stakers (Liquidity Contributors) Stakers provide the liquidity that supports the risks underwritten by sponsors within insurance pools. Any liquidity provider—be it a retail investor or an institution—can join, earning APYs and Liquid Insurance Tokens (LITs) in return. These LITs symbolize their share in the pool and can be traded on secondary markets, offering stakers the option to exit or adjust their holdings. Stakers do not participate in governance, claims reviews, or investment choices; their role is limited to supplying capital and generating passive income through pool involvement.

Proposers (Insurance Purchasers) Proposers buy insurance to safeguard their Bitcoin and DeFi assets against threats like slashing, bridge vulnerabilities, and stablecoin instability. They may include:

• Retail investors protecting their personal Bitcoin portfolios.

• DeFi protocols securing liquidity pools or staking operations.

• Institutions handling significant risk exposure in Bitcoin Layer 2 networks. By paying premiums, proposers contribute to the ongoing viability of insurance pools while gaining customized coverage tailored to their unique requirements.

Risk Assessment DAO The Risk Assessment DAO is central to governance and claims management. Comprising security specialists and risk analysts, it handles claim evaluations and supervises critical risk-related decisions. Operating as a decentralized entity, it ensures claims are processed equitably and transparently, supported by an incentive system that rewards precise assessments.