Economic Incentives

Binding economic incentives using RI$K token.

"Show me the incentive and I'll show you the outcome" - Charlie Munger

RI$K tokens are the Governance token of Chainrisk Protocol.

The Chainrisk DAO is Sybil Resistant as no single actor can pool in a large amount & alter any governance decisions which acts against any partner protocol.

The easiest way to acquire RI$K is by providing LSTs as collateral at the coverage markets 2.0, at a leverage.

The Protocol design ensures that it is always a positive sum game for all actors to align with the economic incentives of RI$K token and its utilities today or in the near future as it expands.

Here are a few ways in which RI$K makes sure that the Cost of Corruption > Profits.

• Users staking LSTs (RI$K Holders) in the AVS are always aligned to reduce the risk score of the protocol because their staked LSTs are at risk of loss in the event of claims.

• RI$K tokens can be borrowed from an open coverage market. Here, the user is taking a bet that the protocol's risk score decreases. Thus, his own funds are at risk of liquidations if he performs any malicious act within the Chainrisk DAO.

• A reputation system will be integrated into the AVS. Users who withdraw during claims shall see a decrease in their reputation score. Stake slashing (partial loss of staked LST) and RI$K Slashing will also be implemented for users with consistently bad withdrawal behavior during critical events.

• Every time there is a claim, the user gets rewarded in additional RI$K tokens. This reward is higher for users with a higher reputation score.