For security and transparency, underwriting reserves are held in a smart contract/escrow treasury managed by a DAO. The DAO is legally registered in a crypto-friendly jurisdiction to protect the members and founders. We are currently debating the choice of domicile and aim to guide regulators on regulating novel financial architectures within the crypto space.
The founders and underwriting community will govern policies issued on behalf of the DAO via a governance model. Access to the reserves is intentionally challenging. Withdrawals from the reserve require a valid claim submission, with only the necessary capital to cover the claim permitted as a withdrawal. Policyholders only can submit claims, and validators assess the validity of claims. Underwriters can withdraw their capital under specific conditions outlined in their underwriting agreement with the DAO.
Smart contracts ensure that claims and underwriting withdrawals are the only ways funds can leave the escrow account, providing transparency and security. The founders and employees of Plural DAO and Plural DATA cannot access the funds, as the goal is decentralization.
If the DAO fails, underwriting funds will be returned to depositing wallets. The failure criterion that triggers the smart contract repayment will be made public to ensure transparency.