Underwriting

📖 Underwriting Workflow in Centuari Protocol

The Centuari protocol introduces a decentralized underwriting mechanism powered by an Active Validator Set (AVS), where a network of operators collectively ensures the integrity and security of borrowing activities executed through a CLOB (Central Limit Order Book)-based lending platform.

📌 Process Overview:

1. Borrow Request Initialization reqToBorrow An operator (for example, Operator A) initiates a borrowing request by interacting with the AVS Contract. This action triggers the reqToBorrow function, submitting the request to be processed by the operator set.

2. Operator Validation and Consensus The AVS contract disseminates this request to other active operators (Operator B, C, D, etc.) for validation. Each operator independently verifies the validity of the borrowing task and submits their approval or rejection.

   This collaborative validation process mitigates single-operator risk and maintains protocol resilience by ensuring that no malicious actor can independently authorize unsafe loans.

3. Fund Distribution and Underwriting Commitment Upon achieving consensus, the AVS contract releases funds from the lending Pool and allocates them to Operator A, who is responsible for executing the borrowing transaction through the CLOB.

4. Restaking as Underwriting Collateral As part of the underwriting mechanism, operators are required to maintain restaked assets within the lending pool. This stake acts as implicit collateral or guarantee for the borrower's position. If an operator acts maliciously or fails to fulfill obligations, their restaked assets are subject to slashing, incentivizing honest behavior and diligent validation.

5. Transaction Execution The funds are deployed into the CLOB, matching with lenders based on the predefined order terms. Once matched, lenders’ funds move into the pool, while the borrower gains access to liquidity.

Operator Workflow

📑 Description of Key Arrows in the Diagram:

• 🔴 Red Arrow — reqToBorrow initiated by Operator A

• 🟠 Orange Arrows — Validation process by other operators

• 🔵 Blue Arrow — Funds are sent to Operator A upon consensus

• 🟢 Green Arrow — Restaking action by operators to maintain underwriting collateral within the pool

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📊 Strategic Implications:

This underwriting model elegantly aligns incentives between borrowers, lenders, and operators while preserving decentralized trustlessness. It ensures:

• Collective operator accountability

• Non-custodial, over-collateralized borrowing through restaking

• Minimized counterparty risk via decentralized validation

• Flexible integration with both retail and institutional lending use cases

Centuari effectively pioneers a restaking-as-underwriting framework, positioning itself as an advanced decentralized lending primitive within modular blockchain ecosystems.