The rulebook
A lending book is eligible for a market only if it passes the rulebook. The rule, not the current list, is the authority, and it is fixed at the start of each series, so no name can be inserted into a live one.
What qualifies a book
- Real economic loss. The book carries a borrower default, real collateral falling below the debt, or a liquidation that gaps and recovers less than the loan. A hack or exploit of the protocol's own contracts does not qualify.
- Real borrower or real collateral. The exposure funds a real business, trading firm, or asset, with collateral that can move in price.
- Live and current. The book is actively drawn, current, and not impaired at selection.
- Size floor. Outstanding principal above the floor.
- Name diversification. Enough unrelated names, value weighted by size with a cap on the largest.
- Protocol diversification. More than one protocol.
- Readable on chain. Each loan, its size, its status, and any write down is read directly from the chain.
- Determination. A loss event is read against the rulebook to decide whether it settles, with a bonded challenge for contested cases.
What settles and what does not
A loss that settles is a real economic loss on the book, read from the chain: a borrower default where recovery falls short, real collateral below the debt, or a liquidation that gaps. The following do not settle.
- Forged or counterfeit collateral.
- External exploits that mint fake assets.
- A hack or exploit of the protocol's own contracts.
Contested cases go to a bonded challenge. A challenger posts a bond, the on chain evidence is put on the record, and a determination panel rules on whether the event settles. Ravariant reads the loss and runs the determination. It holds no position and sets no price.
Reconstitution
The eligible set is fixed at the start of a series and reviewed on a set schedule. A name that defaults, collapses, or falls below the floor is dropped at the next roll. A candidate enters once it passes the rulebook with a live, verified book. The full universe, the rule each name passes or fails, and the watchlist of candidates live in the index methodology.