claims & settlement
How a verified event becomes USDC in eligible addresses, and how payouts are sized.
There is no claim to file. "Claims" here describes the accounting, not a process a holder goes through.
Why there is no claim form
Every input to a settlement is already onchain: balances at the event block, acquisition times, the measured change in value. A form would ask holders to restate facts the protocol can read directly, and would introduce a step where a settlement depends on whether someone noticed in time.
So settlement is pushed, not pulled. When an event is verified, the settlement set is computed and payments are sent.
Sizing a payout
Three constraints apply in order.
1. Pro-rata to $HERA holdings. The eligible pool is divided in proportion to each address's $HERA balance. $HERA is what aligns the people funding the reserve with the people the reserve protects.
2. Capped at verified loss. No address receives more than the loss computed for it at the event block. Where the pro-rata share exceeds the verified loss, the excess returns to the pool and is redistributed among addresses still below their cap.
3. Bounded by the per-event reserve share. Total settlement for one event cannot exceed 10% of the reserve balance at verification — a draft parameter, subject to change.
When the cap binds
If total verified loss across eligible addresses exceeds the per-event bound, every address is scaled by the same factor.
A worked example, with round numbers for clarity:
| Value | |
|---|---|
| Reserve balance at verification | 400,000 USDC |
| Per-event bound (10%) | 40,000 USDC |
| Total verified loss, eligible addresses | 100,000 USDC |
| Scaling factor | 0.40 |
| An address with 250 USDC of verified loss receives | 100 USDC |
Nobody is settled in full while others are settled at nothing. The shortfall is shared.
Timing
| Stage | Timing |
|---|---|
| Event detected and declared | Close to the event block |
| Dispute window open | 1 hour (draft) |
| Settlement set computed | On window close |
| USDC sent | Same transaction batch |
Payments are ordinary USDC transfers on Arc. No action is needed to receive one, and no approval is required.
Reading a settlement
Every settlement is traceable back to its declaration: the event id, the event block, the verified loss used, and the scaling factor applied. The settlement feed on the home page shows this record in the format it takes once live.
What settlement is not
It is not compensation for a market loss, it is not a guarantee of being made whole, and it is not a payout that can be negotiated upward. It is the mechanical consequence of a verified event, bounded by a finite reserve. See Risks & Limitations.