# kaal:claim:3782216-017

**Claim.** In the Underwriting DAO a breach occurs only when the market values the encumbered reputation tokens at less than the payout, which requires minting additional tokens to meet the claim.

**Type.** failure  **Support.** argued

**Holds when.**

- Underwriting DAO with encumbered reputation tokens

**Source quote.**

> We would consider the need to mint more reputation tokens to meet a policy claim to be a breach. Under what circumstances would a breach occur? It would occur only if the market values the encumbered reputation tokens as less than the payout.

**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

**Failure mode.** underwriting breach  (family: staking-and-incentive-misalignment)

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

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

**Related claims.**

- restates: https://wulfkaal.github.io/claims/3396542-013

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