overview

HERA is an onchain protection protocol on Arc. It maintains a transparent reserve, watches covered tokens continuously, and settles verified loss events to eligible holders in USDC.

The protocol exists because holders on a fast chain carry a class of risk that markets do not price and that no counterparty absorbs: liquidity being withdrawn, supply being changed after it was said to be fixed, transfers being switched off. These are discrete, observable events. They leave a record onchain. HERA treats them as such — detect the event, verify it against the chain, open a window for challenge, then settle.

Why Arc

Arc is Circle's stablecoin-native L1. USDC is the gas asset, which has two consequences that matter here.

The first is settlement. A holder who has just taken a loss should receive something with stable value, and should not have to acquire a second asset in order to receive it. On Arc, a USDC settlement is an ordinary transfer, not a bridge or a swap.

The second is the reserve. A protection reserve denominated in the chain's own settlement asset does not carry the basis risk that a reserve held in a volatile token would. The balance you can verify today is the balance available when an event occurs.

The three parts

The reserve. A contract-held balance funded by a fixed share of protocol fees. Its allocation is set in the contract rather than decided after collection. See The Reserve.

Monitoring and verification. Continuous observation of covered tokens against defined thresholds, followed by onchain declaration and a dispute window. See Loss Events.

Settlement. Computation of the eligible set from pre-event balances, and payment in USDC without a claim being filed. See Claims & Settlement.

What HERA does not do

HERA does not cover ordinary market losses. A position that falls in value because the market moved is not a loss event and will not be settled, regardless of how severe the fall is.

HERA does not guarantee recovery. The reserve is finite; payouts are bounded by it. A large event can settle at a fraction of the verified loss.

HERA does not exercise discretion in individual cases. Eligibility is computed from onchain state. There is no appeals process that produces a different answer for a sympathetic address.

Read Risks & Limitations before forming an expectation about what coverage is worth.

Draft parameters

The numeric parameters published across these docs are draft parameters, subject to change. They describe the intended shape of the system, not a commitment. The authoritative values at any time are the ones readable from the deployed contracts, which are listed on Contracts.