# kaal:claim:3396542-011

**Claim.** If underwriters decline to reclaim their encumbered tokens, that breach is resolved by selling the encumbered tokens, plus additional freshly minted tokens as needed, in an auction open to current DAO participants and to outsiders wishing to join.

**Type.** mechanism  **Support.** argued

**Holds when.**

- breach by underwriters on a specific policy

**Source quote.**

> In such a case, the encumbered tokens, along with additional freshly minted tokens as needed, would be sold in an auction. All current DAO participants as well as outsiders interested in joining the DAO may bid for the tokens in this auction.

**From.** Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, *Decentralized Underwriting* (2019), II. The Design of the Underwriting DAO, page 5

**Cite as.** Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542

**Verify.** sha256 of source PDF `ce2bda03a0b788ea3e7747f02c3c351ef7c808a41150d5cda34767bbe98800c0` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Calcaterra%20et%20al.%20-%202019%20-%20Decentralized%20Underwriting.pdf

**Topics.** systemic-risk, tokenomics, dao

**Keywords.** breach-resolution, token-auction, claims-coverage, dao-design

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.