Issuer
A claim depends on the entity issuing the asset and its ability to meet its obligations.
ONCHAIN COVER, RECONSIDEREDISSUER · BRIDGE · ORACLE · CUSTODY · LIQUIDITY
When everything
fails together.
The next loss may arrive through five doors at once. Price the connections before you cover the assets.
Read our investment thesis ↗ONE HYPOTHETICAL
SHARED-FAILURE EVENT60%loss severity across five exposures
SHARED-FAILURE EVENT60%loss severity across five exposures
$10,000,000 PORTFOLIO EXPOSURE−$6MThe tail is a capital event.
Illustrative stress scenario: five equal $2M exposures, each losing 60% in the same event. No historical loss or forecast is implied.
Five labels.
One possible failure chain.
The proposed pool maps the infrastructure behind an exposure. Different assets can share the same weak point.
Custody
Separate wrappers may rely on the same asset custodian or operational process.
Bridge
A transfer path can introduce a common dependency across chains.
Oracle
Shared price inputs can trigger correlated valuations or liquidations.
Liquidity
An exit that looks available in normal markets may disappear when everyone needs it.
ILLUSTRATIVE TRANSMISSION PATH
Shared oracle fails→Valuations move together→Liquidations crowd the exit
A dependency map asks how one event could reach several exposures. It does not assume every failure follows this path.
The average can stay calm.
The tail can get expensive.
Five equal exposures. A 5% failure chance each. A 60% loss when an exposure fails. Change only how often those failures arrive together.
illustrative premium
$30,000 average loss
About $254,261 average loss in the worst 1%
illustrative premium
$30,000 average loss
$600,000 average loss in the worst 1%
The demo premium adds 10% of worst-1% average loss to expected loss. Figures are rounded, hypothetical and uncalibrated. They are not insurance quotes.
Try the simple simulation ↗Make the assumptions inspectable.
Map the shared infrastructure.
Identify common issuers, custodians, price sources and exit routes. Record which links are established and which are assumptions.
Build the joint loss distribution.
The research proposes correlated-loss simulation. The educational demo calculates six possible loss levels exactly so you can see the whole distribution.
Compare premium and capacity.
Look at expected loss and the worst tail before deciding how much exposure a pool could support. Change the dependence assumption and repeat.
02 / THE MODEL99%
CVaR confidence level.
The question is how severe the remaining 1% can be.
THE MATHEMATICAL FOUNDATION
One incident can trigger many losses.
L = Σᵢ EᵢIᵢ
Premium = E[L] + λCVaR₀.₉₉(L) + κTailCorr(L)
- Eᵢ
- Exposure to each infrastructure risk
- Iᵢ
- Loss indicator or loss severity
- CVaR
- Mean loss in the worst 1% of simulations
- TailCorr
- Dependence of extreme failures
Make the hidden
premium visible.
Monte Carlo scenarios. Shared infrastructure failures. A comparison against independent-risk pricing on the same exposure basket.
Follow the research ↗WHAT THE RESEARCH DOES—AND WHAT IT NEEDSA model is the start
A model is the start
of underwriting.
What changes in the simulation?
You control total exposure, individual failure probability and shared-shock linkage. Severity stays at 60%. Linkage changes the distribution while preserving each exposure’s failure chance.
What would a live cover pool also need?
Defined coverage events, exclusions, claims evidence, capital and reserve policies, a time horizon and calibrated data. Those terms are not supplied by the teaching model.
Can I buy cover here?
No. TailPool is a concept-stage research project. The site explains the approach and lets you compare hypothetical loss distributions.
NETWORK HORIZONBuilt around the risks