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Risk Mitigation and Premium Modeling

Kohin’s premium calculation is a critical part of how we manage risk for both bettors and liquidity providers. The system adjusts premiums based on various factors:

  1. Risk Factors:

    1. Bet Type: Single vs Combo bets carry different risk profiles.
    2. Odds: Higher odds mean a higher risk of loss, leading to higher premiums. Lower odds reflect lower risk, resulting in more affordable premiums.
    3. Bettor's History: A bettor’s past performance may influence the premium, rewarding more consistent players with lower rates.
    4. Bet Amount: Larger bets carry more risk, so premiums increase with the bet size. Smaller bets have lower premiums.
    5. Outcome Ratio: The outcome ratio compares the number of bettors choosing the same outcome to those betting on the opposite outcome. It helps Kohin assess risk and balance coverage, ensuring the insurance pool isn’t overly exposed to one-sided bets.

  2. Dynamic Premium Modeling:

    Using a risk-based model, Kohin adjusts premiums in real-time to ensure that the users are protected. This model helps maintain the sustainability of the insurance pool while offering fair rates to users.

By using these mechanisms, Kohin ensures that betting remains a safer, more engaging experience, while the insurance pool remains profitable and well-balanced for liquidity providers.