The Neptune Mutual protocol doesn't know about events happening in the real world.
To correctly establish the fact of a cover incident, the NPM tokenholders participate in a consensus system
known as reporting
. A reporter
is the first person to report an incident; a candidate reporter
is the first person to disagree with the reporter. The NPM tokenholders can support the reporter by submitting attestations
or the candidate reporter by submitting refutations
.
The consensus rule for each cover product has a reporting period
that begins as soon as a report is submitted. To participate in the reporting system, tokenholders must stake
their tokens.
A decision, or resolution
, is made at the end of a reporting period. If the resolution is in favor of the reporter, policyholders can submit claims
. As opposed to existing discretionary cover protocols on Ethereum, Neptune Mutual policyholders receive claims payouts
immediately without having to wait, provide proof of loss, or undergo a special membership process.
As a result of the resolution, the invalid camp loses all its tokens. Some will be burned while others will be awarded to the valid camp.