As an actuary, the distinction Iād make here is between claims being paid and holders losing capital.
ONyc is not a stablecoin. Itās a NAV-based asset whose value moves with underwriting performance and collateral yield.
OnReās quoted yield already allows for expected claims through actuarial reserving. Premiums arenāt all treated as profit - thereās a reserve for the claims expected to come through, including losses that have occurred but havenāt been reported yet.
When a fully reserved claim is paid, cash falls but so does the liability already recognised. You donāt take the same loss twice.
The risk is that claims turn out worse than those estimates. That can reduce yield and, if sufficiently severe, principal. Reserving doesnāt eliminate underwriting risk, and leverage amplifies the consequences.
So I agree users need to understand what theyāre not looping a stablecoin. But a 2% claim payout doesnāt imply a 2% ONyc NAV loss. The question is how much losses exceed whatās already been allowed for, and how much of that excess the remaining income can absorb.