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.