> For the complete documentation index, see [llms.txt](https://chainrisk.gitbook.io/chainrisk-whitepaper/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://chainrisk.gitbook.io/chainrisk-whitepaper/protocol-abstract.md).

# Protocol Abstract

Chainrisk Protocol : A DeFi Insurance AVS for Per-Market, Per-Asset Coverage

### **Motivation.**

Decentralized Finance (DeFi) offers fair and transparent on-chain markets, but DeFi protocols remain vulnerable to known and unknown market risks. Securing protocols and safeguarding Total Value Locked (TVL) is crucial. Existing insurance solutions face challenges, including a retail-heavy focus, siloed risk pools, and difficulty underwriting technical attack vectors.

### **Proposed Solution.**

This paper introduces Chainrisk Protocol, a novel DeFi Security protocol that is building the world's first Insurance AVS on EigenLayer. Chainrisk focuses on per-market, per-asset coverage with isolated risk pools for increased economic efficiency. The AVS underwrites market risks, which are auto-scalable compared to technical risks.

### **Key Innovations.**

* **Institutional Capital Focus:** Chainrisk prioritizes large institutional capital within the insurance pool for stability.
* **Isolated Risk Pools:** The AVS utilizes isolated risk pools to manage risks specific to each market and asset.
* **Market Risk Underwriting:** The AVS focuses on auto-scalable market risk underwriting for economic efficiency.
* **Economically Secure Model:** The AVS in combination with $RISK Token incentivizes rational and honest behavior amongst users to secure DeFi protocols.

### **Contribution.**

Chainrisk proposes a novel solution for DeFi insurance by addressing existing limitations and fostering a secure, economically driven environment for DeFi users and large institutions.