Actuarial science meets onchain capital solvency
Discover mathematical standards, capital adequacy frameworks, catastrophe risk modeling, and empirical research powering modern decentralized insurance.
Decentralized Solvency II: Calibrating 99.5% VaR & Capital Adequacy Ratios for Smart Contract Underwriting
Authored by the InsurChain Actuarial Working Group in collaboration with former Swiss Re and Cambridge Centre for Alternative Finance researchers. Defines mathematically rigorous stochastic copulas for systemic DeFi contagion and correlated exploit events.
Published Publications & Research
Minimum Capital Requirements (MCR) in Decentralized Pools
Stochastic evaluation of reserve pool drawdown under severe market volatility, de-peg shocks, and correlated reentrancy exploits across multi-asset collateral vaults.
Parametric Oracle Latency & Basis Risk Mitigation
How sub-second decentralized oracle networks eliminate settlement delays and minimize discrepancy between physical loss events and onchain trigger resolution.
Dissecting the $28M Cross-Chain Bridge Claim Settlement
An empirical forensic audit of how smart contract claims assessors verified validator signature anomalies and executed automated parametric payouts in under 4 minutes.
Tokenized Catastrophe Bonds & Onchain Retrocession
Securitizing real-world disaster insurance risk and decentralized protocol backstops into ERC-4626 multi-tranche yield vaults with secondary liquidity on AMMs.
Automated Proof of Reserve for Capital Pools
Cryptographic verification standard for underwritten capacity: preventing fractional-reserve coverage through multi-signature attestation and automated circuit breakers.
Slashing Insurance in Restaking Ecosystems
Quantifying the tail-risk probabilities of AVS correlated slashing events and designing optimal deductible tranches for liquid restaking tokens (LRTs).
Web3 Insurance & Actuarial Glossary
Clear mathematical and practical definitions of key concepts in decentralized risk underwriting.
#01 Parametric Trigger
A deterministic condition evaluated by smart contracts (e.g. oracle confirms price de-peg below $0.90 for >12 blocks) that automatically releases payout without manual claims committee approval.
#02 Basis Risk
The discrepancy between the financial loss actually suffered by a policyholder and the payout triggered by an automated index or parametric oracle threshold.
#03 Solvency Ratio (CAR)
The ratio of available capital reserves in protocol vaults divided by the required solvency capital margin. Ratios above 150% indicate strong institutional resilience.
#04 Value-at-Risk (VaR 99.5%)
The statistical loss threshold that a protocol capital pool will not exceed with a 99.5% confidence level over a designated 1-year underwriting cycle, adapted from European Solvency II.
#05 Reinsurance Retrocession
A risk management mechanism wherein primary decentralized insurance capital pools offload extreme tail-risk tranches to secondary capital vaults or institutional underwriters.
#06 Combined Ratio
The sum of incurred payout losses and protocol operational/gas expenses divided by earned policy premiums. A combined ratio below 100% signifies underwriting profitability.
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Bi-weekly research notes covering smart contract exploits, capital adequacy alerts, and decentralized reinsurance market developments.