Cross-Chain Insurance Protocol

An advanced decentralized insurance protocol that leverages the Reactive Network to monitor risk indicators across multiple blockchains and automatically process claims without requiring manual intervention.

Overview

The Cross-Chain Insurance Protocol represents a significant advancement in on-chain insurance, removing the traditional claims process entirely by leveraging reactive smart contracts to monitor for insurable events in real-time across multiple blockchains.

Key Features

• Real-time Risk Monitoring: Continuously observes smart contracts, stablecoins, bridges, and markets for signs of risk events
• Automated Claims Processing: Immediately executes payouts when qualifying events are detected without requiring user action
• Cross-Chain Coverage: Monitors and provides protection for assets across multiple blockchains
• Dynamic Risk Assessment: Adjusts premiums based on real-time risk indicators collected from on-chain data
• Multiple Coverage Types: Offers protection against smart contract exploits, stablecoin depegs, bridge failures, and market volatility

Architecture

The protocol consists of several integrated components that work across both the destination chain(s) and the Reactive Network:

Destination Chain Contracts

• InsurancePool.sol: Manages capital pools, policy purchases, and claim payouts
• PolicyManager.sol: Handles policy creation, management, and claims verification
• RiskModel.sol: Calculates premiums based on risk parameters and collects risk data
• RiskDataCollector.sol: Gathers and processes on-chain risk metrics
• ClaimTrigger.sol: Receives callbacks from reactive contracts to process claims

Reactive Network Contracts

• InsuranceEventListener.sol: Monitors for insurable events across chains including:
  • Smart contract exploit patterns
  • Stablecoin price deviations
  • Bridge security events
  • Market volatility spikes

Coverage Types

Smart Contract Exploit Coverage

Automatically compensates users when the protocol detects abnormal behavior indicating an exploit, such as:

• Large/rapid transfers of funds
• Unusual access patterns
• Known exploit signatures

Stablecoin Depeg Insurance

Provides protection when a stablecoin's price deviates from its peg for a specified duration:

• Monitors price feeds across DEXs and oracles
• Triggers payouts when price thresholds are violated
• Adjusts premiums based on historical stability

Bridge Security Coverage

Offers protection against bridge failures or exploits:

• Monitors bridge contracts for security events
• Processes claims when unauthorized fund movements are detected
• Adjusts risk parameters based on bridge security features

Market Volatility Protection

Activates downside protection during extreme market conditions:

• Tracks rapid price movements of covered assets
• Triggers claims during significant market dislocations
• Uses historical volatility for premium calculation

Technical Implementation

The protocol leverages the Reactive Network's unique capabilities:

1. Event Subscriptions: Monitors specific event signatures across multiple chains
2. Reactive VM Processing: Analyzes events to detect insurable incidents
3. Cross-Chain Callbacks: Triggers claim processing on destination chains
4. State Management: Maintains detailed records of risk parameters and policy data

Getting Started

Prerequisites

• Node.js and npm
• Hardhat development environment
• Access to Reactive Network RPC endpoint
• Private keys for deployment

Installation

1. Clone the repository:

git clone https://github.com/your-username/cross-chain-insurance.git
cd cross-chain-insurance

2. Install dependencies:

npm install

3. Configure environment variables:

cp .env.example .env
# Edit .env with your configuration

Deployment

1. Deploy destination chain contracts:

npx hardhat run scripts/deploy.js --network sepolia

2. Deploy reactive network contracts:

forge create src/InsuranceEventListener.sol:InsuranceEventListener --legacy --rpc-url $REACTIVE_RPC --private-key $REACTIVE_PRIVATE_KEY --value 0.01ether --constructor-args CLAIM_TRIGGER_ADDRESS

3. Configure contract relationships:

npx hardhat run scripts/configure.js --network sepolia

Testing

Run tests for destination chain contracts:

npx hardhat test

Test the reactive network components (requires Reactive Network access):

forge test --match-contract InsuranceEventListenerTest --rpc-url $REACTIVE_RPC

Future Development

• Risk Oracle Integration: Connect with decentralized risk assessment oracles
• Multi-Chain Capital Pools: Enable liquidity sharing across insurance pools on different chains
• Governance Framework: Add DAO governance for parameter adjustments and protocol upgrades
• Premium Tokenization: Create transferable premium tokens representing insurance positions

License

GPL-2.0-or-later

Acknowledgments

• Reactive Network for providing the reactive smart contract infrastructure
• OpenZeppelin for secure contract libraries