Claims & Governance
In the DeFi insurance AVS built on EigenLayer, our governance system plays a crucial role in making important decisions that affect the overall health and direction of the AVS. Here are some key areas where governance will be involved:
Risk Assessment Parameters:
Risk Scoring Model: The governance body will vote on adjustments to the risk assessment model's parameters (K and F factors in the premium formula). This allows for adapting to evolving DeFi risks and ensuring fair pricing for different protocols.
Blacklisting and Whitelisting: Governance will vote to blacklist specific DeFi protocols deemed too risky or whitelist new protocols that meet established criteria.
Risk Parameter Recommendations:
Due Dilligence: Governance shall review the parameter recommendations and the underlying statistical exposition before providing it to any protocol.
Premium and Coverage Settings:
Minimum Coverage Amounts: Governance will decide on minimum coverage amounts required by DeFi protocols to participate in the AVS pool.
Premium Discounts or Adjustments: They will vote on implementing premium discounts for specific types of DeFi protocols or adjust premium calculation factors based on market conditions.
RISK Token Utility and Distribution:
Staking Rewards: The governance body will determine the allocation of a portion of collected premiums to reward RISK token holders who participate in staking.
Future Utility Features: They shall vote on implementing new features for RISK tokens, such as discounts on fees within the AVS platform or access to exclusive governance proposals.
AVS Upgrades and Development:
Protocol Upgrades: Governance shall vote on approving proposed upgrades to the AVS smart contracts or off-chain risk assessment engine.
Integration Proposals: They shall consider proposals for integrating the AVS with other DeFi platforms or services to expand its reach and utility.
Dispute Resolution:
Claim Processing: While the AVS might have automated claim processing based on pre-defined rules, governance all also be involved in handling complex or disputed claims.
Slashing Appeals: Governance shall vote on appeals from users who were penalized (lost staked LSTs) for violating AVS rules to ensure fair treatment.
Governance Structure:
RISK Holder Voting: LST stakers could participate directly in governance proposals based on the amount of LST they have staked. Staking more LSTs would accrue them more governance points which could later be converted into Governance ($RISK) tokens.
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