4.1 Empowering Decentralized Coverage: Key Functions

Verified Nodes are the cornerstone of InsuranceDAO.World, providing specialized coverage to various asset classes, such as DeFi protocols, NFTs, and real-world assets (RWAs). Each node operates as an autonomous unit, handling specific types of risk with precision and trust. Here’s how they function:

1. Risk Pooling & Liquidity Management

Verified Nodes enable decentralized risk pooling, allowing users to stake capital into insurance pools that provide liquidity to cover claims. These pools ensure the stability and solvency of the platform by distributing risk across various participants.

2. Specialized Coverage for Specific Risks

Each Verified Node is designed to cover particular types of risk:

• DeFi risks like protocol failures and staking losses.

• NFT risks like liquidity crashes and price volatility.

• RWA (Real-World Asset) tokenization risks like market fluctuations and legal issues.

3. Automated Claims Validation via Oracles

Verified Nodes leverage decentralized oracles to validate claims objectively and in real-time. These oracles pull market data and ensure claims are processed fairly, triggering payouts only when conditions are met.

4. Smart Contract-Driven Underwriting

All transactions—from premium calculations to claims processing—are automated via smart contracts, reducing the risk of human error, ensuring speed and transparency, and improving operational efficiency.

5. Continuous Adaptability

Verified Nodes are built with AI-powered adaptability, meaning they can continuously recalibrate premiums and coverage terms based on evolving market data, ensuring that coverage stays relevant and fair as the ecosystem grows.