# kaal:claim:3782216-016

**Claim.** Underwriters encumber reputation tokens against each policy under a preset formula, and if the insured event occurs they lose control of those tokens, which are auctioned to meet the claim, with new tokens minted and sold if the auction falls short.

**Type.** design  **Support.** argued

**Holds when.**

- Underwriting DAO design

**Source quote.**

> In case the insured event were to occur during the life of the policy, the agents who underwrote the policy would lose control of their encumbered tokens, which would be sold at auction to meet the claim.

**From.** Craig Calcaterra, Wulf A. Kaal, *Decentralized Finance (DeFi)* (2021), Decentralized architecture

**Cite as.** Craig Calcaterra, Wulf A. Kaal, Decentralized Finance (DeFi) (2021). SSRN: https://ssrn.com/abstract=3782216

**Verify.** sha256 of source PDF `f1739743aa06bbc1641cd65da790d531b69d8628ea3f5cc3fcad1bf5a1242373` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Calcaterra%20and%20Kaal%20-%202021%20-%20Decentralized%20Finance%20%28DeFi%29.pdf

**Topics.** dao, defi, reputation, tokenomics

**Keywords.** underwriting-dao, collateral, reputation-tokens, claims

**Related claims.**

- extends: https://wulfkaal.github.io/claims/3396542-010

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