Using Symbiotic, insurance protocols can be easily built through modular vaults.
Stakers deposit assets like wstETH into these vaults to back insurance claims. They earn yield from premiums paid by those seeking coverage.
Instead of one big shared pool, Symbiotic enables specialized vaults for different risks.
One vault might cover oracle failures, another protects against smart contract bugs. This lets underwriters choose their exact risk exposure.
Protocols can create their own vaults or use existing ones.
New insurance products don't need to raise capital from scratch: they can tap into vaults that already have the right risk parameters and capital structure.
Each vault has configurable rules for payouts and penalties.
When valid claims occur, the system automatically burns or redistributes collateral based on real-time data from oracles, creating programmable insurance rather than manual processes.
Vaults can also include compliance features like KYC requirements for underwriters.
This turns static capital into flexible insurance infrastructure that works both onchain and with traditional regulatory frameworks.
For more on Symbiotic's architecture, check out our documentation: