The OBCD Lifecycle

The lifecycle of an OBCD involves four distinct stages, handled automatically by the FaaSFi protocol.

1. Minting (Origination)

  • Request: The client defines the risk event (e.g., "Brent Crude Oil > $100 by Dec 31").

  • Quote Generation: FaaSFi's aggregation engine scans the order books of Polymarket, Kalshi, and Limitless to calculate the weighted average cost of coverage.

  • Issuance: The client accepts the quote. The OBCD smart contract is minted on the blockchain, representing the client's claim.

2. Premia Management

  • Payment: The client pays the premium in Fiat (USD) or Stablecoins (USDC).

  • Liquidity Routing: The protocol splits this premium. For example, 40% is routed to buy "Yes" shares on Kalshi (US regulated), 40% to Polymarket (Global liquidity), and 20% to Limitless (Capital efficient leverage).

  • Collateral Lock: The shares purchased on these underlying markets serve as the collateral backing the OBCD.

3. Trigger Event (Oracle Monitoring)

  • Data Aggregation: The FaaSFi Oracle monitors the resolution data from the underlying platforms.

  • Threshold: The contract defines a specific probability threshold or resolution status. For example, "If the event is resolved as YES on 2 out of 3 underlying platforms."

  • Parametric Trigger: Unlike traditional insurance which requires damage assessment, the OBCD triggers solely based on data. If the event happens, the payout logic is activated immediately.

4. Settlement

  • Liquidation: The protocol sells the winning positions or redeems the winning shares from the underlying markets (Polymarket/Kalshi/Limitless).

  • Payout: The proceeds are converted back to the client's preferred currency and transferred to their corporate account.

  • Efficiency: This process eliminates claims adjusters, reducing settlement time from months to hours.

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