# kaal:claim:3396542-024

**Claim.** In the DAO structure, provided an adequate token encumbrance system is in place, each agent is individually responsible for the payouts on the policies that agent underwrote, so the burden of holding adequate capital shifts from the entity to each individual agent.

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

**Holds when.**

- a good system ensures adequate tokens are encumbered per policy

**Source quote.**

> each agent is responsible for meeting the payouts on the policies they have underwritten. Consequently, the burden of maintaining adequate capital falls on each individual agent

**From.** Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, *Decentralized Underwriting* (2019), V. MODEL, 4. Capital Requirements, page 22

**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.** risk-and-incentives, dao

**Keywords.** capital-requirements, risk-allocation, collateralization, dao-design

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