kaal:claim:3396542-021

The DAO is insolvent when the present value of expected cash flows from new policies falls below the expected cash outflow on currently outstanding policies, and in that state the value of a token is negative.

The DAO will be insolvent if the value of the DAO becomes negative - in other words, if the Present Value (PV) of expected cash flows from new policies is less than the expected cash outflow from currently outstanding (old) policies. If the DAO is insolvent, the value of a token will be negative.

Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019), V. MODEL, 3. DAO Insolvency, p. 18
https://ssrn.com/abstract=3396542 · source PDF

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

conditionsupport: arguedfailure: DAO insolvency with negative token valuefamily: valuation-and-pricing-failuretokenomicseconomicsdao

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