> ## Documentation Index
> Fetch the complete documentation index at: https://mintlify.com/p2pdotme/docs/llms.txt
> Use this file to discover all available pages before exploring further.

# Insurance

> Three-tier insurance stack for protocol security

The protocol design includes a three-tier insurance stack to protect against losses and ensure dispute resolution doesn't create externalized costs.

## Insurance Tiers

<Steps>
  <Step title="CAIP: Circle Admin Insurance Pool">
    First-line coverage funded by a percentage of Circle volume plus slashed stakes
  </Step>

  <Step title="CALR: Circle Admin Locked Rewards">
    A portion of admin earnings locked in a rolling buffer
  </Step>

  <Step title="PIP: Protocol Insurance Pool">
    Backstop for systemic failures or depleted lower-tier pools
  </Step>
</Steps>

## Tier Details

### CAIP (Circle Admin Insurance Pool)

**First-line coverage** for disputes and merchant failures.

**Funding Sources:**

* Percentage of Circle transaction volume (17.78% of protocol revenue)
* Slashed stakes from misbehaving Circle Admins

**Purpose:**

* Cover routine disputes
* Compensate users for merchant failures
* First pool accessed for claims

### CALR (Circle Admin Locked Rewards)

**Second-tier buffer** from admin earnings.

**Structure:**

* Portion of Circle Admin rewards automatically locked
* Rolling buffer that builds over time
* Released only if needed for claims

**Purpose:**

* Additional layer of admin accountability
* Skin-in-the-game for Circle operators
* Intermediate coverage before protocol pool

### PIP (Protocol Insurance Pool)

**Systemic backstop** for large-scale failures.

**Characteristics:**

* Protocol-wide insurance fund
* Used when lower tiers are depleted
* Covers systemic failures
* Last line of defense

## Implementation Status

<Warning>
  The full insurance-pool stack with programmable slash/reward logic and dispute-linked payouts is planned for a future release.
</Warning>

Current insurance mechanisms are operational but will be expanded with:

* Programmable slash/reward logic
* Automated dispute-linked payouts
* Enhanced multi-tier escalation
* On-chain insurance pool management

## Design Philosophy

<CardGroup cols={2}>
  <Card title="Layered Protection" icon="layer-group">
    Multiple tiers ensure comprehensive coverage
  </Card>

  <Card title="Aligned Incentives" icon="handshake">
    Circle Admins have capital at risk in insurance pools
  </Card>

  <Card title="No External Costs" icon="shield-check">
    Disputes funded by protocol, not externalized to users
  </Card>

  <Card title="Systemic Safety" icon="life-ring">
    Protocol pool protects against catastrophic failures
  </Card>
</CardGroup>