System Balance

System solvency requires sustained alignment between incoming funds and claim liabilities.

On this page

  • - Solvency condition
  • - Model summary

Solvency Condition

Stability inequality

sum(Pnet) + Dnet + S - sum(Pclaim) >= 0

The protocol remains solvent when premiums, yield, and stake support cover aggregate payouts over time.

Final Summary

  • Transparent automated claims reduce process ambiguity.
  • Staking can align user incentives with system strength.
  • DAO controls help distribute surplus by community preference.
  • Fixed fee mechanics support operational continuity.