Frequently Asked Questions

As a first-party coverage, what type of policy limits will be provided?

There are going to be three separate policy limits for each policy holder within each captive, however one of the main objectives is to offer multiple captives with each varying in degrees of coverage in order to insure and preserve the Bitcoin wealth of the top Bitcoin holders.

Below are examples for now:

• Tier One Captive - More aggressive trader, perhaps daily but always weekly, trading up to 50% of assets per transaction at least once a month, leverage trading, trades on all all DeFi stack layers. -Policy Coverage(s): -Idle Assets: -Policy Limit: $100,000 -Deductible: 5% -Transaction Assets: -Policy Limit: $100,000 -Deductible: 3 days -DeFi Assets: -Policy Limit: $250,000 -Deductible: 5%

• Tier Two Captive - Monthly trader who doesnt transact more 10% per trade, most wealth is off-chain, level 1 DeFi stack trader. -Policy Coverage(s): -Idle Assets: -Policy Limit: $250,000 -Deductible: 3% -Transaction Assets: -Policy Limit: $250,000 -Deductible: 2 days -DeFi Assets: -Policy Limit: $500,000 -Deductible: 3%

• Tier Three Captive - Long term financial planning and holder. -Policy Coverage(s): -Idle Assets: -Policy Limit: $1,000,000 -Deductible: 2% -Transaction Assets: -Policy Limit: $500,000 -Deductible: 1 days -DeFi Assets: -Policy Limit: $1,000,000 -Deductible: 2%

Would capital surplus be maintained in Bitcoin or USD?

Currently the plan is to accept premiums in Bitcoin and to maintain the capital surplus on-chain in a multi-sig wallet that is composed of a Board of Directors of the captive, however, the exact mechanisms of the multi-sig wallet is still being developed.

Wouldnt coverage for losses deployed in DeFi strategy lend itself to adverse selection (only those with positions prone to losses purchasing coverage)?

Underwriting risk within DeFi allows us to illustrate our risk intelligence and how we are building an insolvent-proof on-chain insurance protocol. One of our risk tolerances will be the Portfolio Concentration risk of our insureds as a group within each captive and the DeFi stack investments they are currently deployed in. We will be providing a risk dashboard for each captive member that will inform them of our custom policy limit thresholds that will be in place for all investments of the captive members.

Essentially, a systemic loss for the entire captive should not financially cripple the captive, so we can utilize live thresholds that update as captive members update their investments. For example, a tier one captive will have lower thresholds than tier thresholds and then will be more specific depending on the current captive members investments. Lets say there are ten DeFi stack investments available and the tier one captive limits a systemic loss to only 10% of the captive pool, then this means that regardless of loss or investment parameters, losses will be limited to 10% of the entire pool and can be claimed proportionally by investment value for the insureds.

Can these coverages be purchased currently with a non-captive insurer?

Bitcoin insurance is not a novel concept though there are currently no known reputable captive insurance and risk products for Bitcoin holders. Our product utilizes wallet risk security first and then insures against the loss based on the policy coverage provided and we are unaware of anyone offering the same or similar within Bitcoin.

How would you develop premium?

Our premium will be actuarially developed inline with regulatory compliance based on the jurisdiction we enter. Since capitve cryptocurrency insurance is new to most regulatory environments and Bitcoin loss history is very limited (at the asset and settlement layer, not the protocol or front-end layer) we will have to create financial models that provide fair premiums while preserving the solvency of the captive in a programmable way. As a catchall basis, we can use Ethereum blockchain loss records to develop a baseline premium.