Takadao Docs
Takadao Whitepaper v2 (tDAOs)
Takadao Whitepaper v2 (tDAOs)
  • Introduction
  • PART A. BACKGROUND
    • 01 - The Insurance Industry
      • Origins of insurance: Mutual protection and risk-sharing
      • The rise of the modern insurance industry
      • The insurance industry today
      • Key Consumer Complaints Against Insurance Companies
    • 02 - Introducing Takadao
      • Takadao: Addressing Consumer Complaints and Industry Challenges
      • Basics of the Blockchain
      • “Taka DAOs (tDAOs)” vs. Centralized Insurance Companies
  • PART B. TAKADAO: THE DAOs
    • 03 - Takadao Technology
      • The Takadao technology stack
      • tDAOs’ user journey
        • Risk assessment and KYC
        • Contribution
        • Membership Credits
        • Get a Payout
        • Redistribution of Surplus
        • Participate in Governance
    • 04 - Underwriting & Risk Management Algorithm
      • Introducing Dynamic Underwriting
        • Absence of capital providers
        • Fluctuating reinsurance protection
        • Using data in real time
      • Takadao dynamic underwriting: A closer look
      • Risk and the Benefit Multiplier (BM)
        • Individual risk and the Base Benefit Multiplier (B.BM)
        • Portfolio risk and the Benefit Multiplier Adjuster (BM.A)
      • Dynamic Underwriting Reserves
        • Calculating the Benefit Multiplier Adjuster (BM.A)
        • The Dynamic Reserve Ratio
        • How underwriting surpluses are calculated
    • 05 - tDAOs’ Tokens aka Membership Credits
      • Membership Credits
      • Make a contribution, receive Membership Credits, become a member
      • Membership agreement
      • Redeem/burn Credits, exit the DAO
      • Credits determine insurance benefit
      • Discontinuing membership before contract maturity
    • 06 - Benefits Payout Protocol
      • Decentralized Benefit Payout Management (DBPM) - A multistage process
        • Stage One - Document Review
          • Pre-verification
          • Manual Verification
          • Stage One Results
        • Stage Two - IRL Verification
          • Stage Two Results
        • Stage Three - Professional Review
  • PART C. TAKADAO: THE COMPANY
    • 09 - The Takadao Vision
      • Vision & Mission
      • Business Model
      • Shariah compliance
    • 10 - The Takadao Token (TAKA)
      • Token Utility
        • TAKA for Fees
        • TAKA for Staking - Reprotection Pool (rePool)
        • TAKA for Rewards
        • TAKA for Governance
      • Token Supply and Distribution
        • Token Supply
        • Token Allocation
        • Token Emissions Schedule
      • Value Accrual and Price Stability: Sources of Token Demand
        • Buy Back and Burn (BBB)
          • Schedule for BBB
          • Mechanism for BBB
        • rePool Staking
          • Benefits of rePool
          • Distribution of rePool yield
          • rePool Loan Support to tDAOs
          • tDAO to rePool Loan Repayment Modalities
        • Lock-up and Vesting Schedules
  • References
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  1. PART B. TAKADAO: THE DAOs
  2. 05 - tDAOs’ Tokens aka Membership Credits

Credits determine insurance benefit

PreviousRedeem/burn Credits, exit the DAONextDiscontinuing membership before contract maturity

Last updated 9 months ago

  • Credits = track member contributions

  • Benefit = credits x B.BM x BM.A

  • Credits burned once payout made, other credits decrease in value

  • The decrease in value of credits represents the cost of protection

In the event of a successful benefit payout, the benefit is determined by an individual’s annual contribution and the assigned Benefit Multiplier.

Benefit payout

=

Base Benefit Multiplier (B.BM)

x

Benefit Multiplier Adjuster (BM.A)

x

Individual Annual Contributions

The Benefit payout is paid from the money held in the tDAO treasury which will reduce the overall funds in the treasury. Credits are also burned as part of this transaction, however, they are not burned in the corresponding amount; instead, the entire Credit balance of the

Example:

At the time of issuance or minting, 10 USDC is added to the DAO fund and 10 credits are minted and issued to new members.

The DAO fund now has 10 USDC and there is 10 CR outstanding which implies a value of 1 CR = 1 USDC.

A successful claim is made by a member who has 1 CR and has been assigned a benefit multiplier of 5x. The benefit payout amount is therefore 1 CR x (BM) 5 = 5 USDC.

5 USDC is transferred out of the DAO fund to the beneficiary and 1 CR is burned. After recalibration, there is now 5 USDC for 9 outstanding Credits which implies a value of 1 CR = 0.56 USDC.

This example assumes that there are no additional tokens minted and there are no investment returns or token redemptions.

The example above shows the change in value of the Credit in the event of a claim. It should be clear that the Credit value decreases for all members in the event of a claim. If a member chooses to cash his surplus out now by redeeming his Credit, it will be less in value than at mint. This reduction in value represents the cost of his membership for the period from first mint till the time of redemption.