NextBlock Docs

Welcome to NextBlock

NextBlock is an institutional protocol for tokenizing reinsurance portfolios on Base, the Layer 2 network incubated by Coinbase. It connects two groups that rarely meet today: reinsurers holding portfolios that need capacity, and institutional capital looking for yield that does not move with equity, credit or crypto markets.

Reinsurance is a market of roughly USD 700 billion in annual premiums. About USD 140 billion of alternative capital already participates through catastrophe bonds, sidecars and collateralized reinsurance, but the instruments are built for large tickets, long lock-ups and a small circle of institutions. A mid-market reinsurer with a USD 30 million cession usually cannot justify the legal and structuring cost. A large reinsurer that wants to free capacity quickly waits months for settlement.

NextBlock rebuilds that path as software. A reinsurer contributes a portfolio into a dedicated vehicle it keeps owning. NextBlock registers the portfolio onchain, a Syndicate reviews and approves it, and a permissioned ERC-4626 vault finances it with USDC from whitelisted Liquidity Providers. Premiums, claims, net asset value and redemptions are settled onchain, inside a compliance perimeter that the smart contracts enforce on every transfer.

The model follows the logic of Lloyd's of London. The reinsurer brings the risk, the Syndicate selects and prices it, and the capital stands behind it. NextBlock writes those three roles into a protocol, adds a proprietary risk engine, Wavenure, and operates under the Digital Assets and Registered Exchanges Act of The Bahamas.

NextBlock is not a reinsurer and does not underwrite on its own account. Underwriting and claims handling stay with the licensed reinsurer. Liquidity Providers bear the underwriting risk of the vaults they choose, and the protocol makes that risk visible, bounded and verifiable.

Introduction

Getting Started

Introduction

NextBlock Vault Share (nbRV)

nbRV is the share token of a NextBlock vault. When a Liquidity Provider deposits USDC into a vault, the vault mints nbRV at the current net asset value per share. Each share represents a proportional claim on the vault's net assets, which are the USDC it holds and the capacity it has allocated to approved reinsurance portfolios, after unearned premium, claim reserves and accrued fees.

Every vault issues its own share series. Shares from one vault are not fungible with shares from another, because each vault finances a different set of portfolios with a different risk profile.

What nbRV is

nbRV is a yield-bearing, NAV priced share. Its value rises as ceded premiums are earned over the coverage period and falls when claims are reserved or paid. Yield accrues through the share price, so there are no distributions to claim and no rebasing of balances.

NextBlock treats nbRV as a security. The design follows from that assumption: the share is restricted, it can only be held by and transferred between wallets whitelisted in the protocol's ComplianceRegistry, and it is offered to institutional investors only.

What nbRV is not

nbRV is not a stablecoin and is not redeemable one-to-one for USDC. The production symbol is nbRV rather than a dollar denominated name for exactly this reason. It is not a governance token, it carries no voting rights over the protocol, and it does not earn emissions, points or liquidity incentives. NextBlock does not issue a utility, staking or governance token.

How the compliance check works

The whitelist check is part of the token contract. Every mint, transfer and burn of nbRV calls the ComplianceRegistry, which verifies that both parties are whitelisted, that their KYC has not expired, that neither address is blocked and that any receiving venue has been approved. If one condition fails, the transaction reverts onchain. A frontend cannot bypass the check, because the check does not live in the frontend.

Introduction

Understanding Reinsurance

What reinsurance is

Reinsurance is insurance for insurance companies. When an insurer holds more exposure than its balance sheet should carry, it transfers part of that risk to a reinsurer and pays part of the premium in exchange. The insurer, called the cedent, frees capital and can write more business. The reinsurer earns the premium and pays its share of the claims.

Reinsurers do the same thing one level up. They cede part of their own portfolios to other reinsurers or to outside capital, a practice called retrocession. This is where NextBlock operates: a reinsurer cedes a defined share of a portfolio to a vault funded by institutional capital.

How the contracts work

Reinsurance treaties define how premiums and losses are shared. The two main families are proportional and non-proportional.

In a proportional treaty, such as a quota share, the reinsurer takes a fixed percentage of every policy in the portfolio, with the same percentage of premium and the same percentage of every loss. A 30% quota share gives the reinsurer 30% of the premium and 30% of each claim.

In a non-proportional treaty, such as excess of loss, the reinsurer pays only when losses exceed an agreed threshold, up to an agreed limit. The cedent keeps the frequent small losses and transfers the severe ones.

Premiums are usually paid in advance and earned over the coverage period. A premium collected for twelve months of cover is earned month by month. The part not yet earned is held as the unearned premium reserve, and it is released as the cover runs.

Why the return profile is different

Reinsurance returns depend on whether insured events happen: storms, fires, liability claims, marine losses. They do not depend on interest rate moves, equity markets or the price of Bitcoin. This is why institutional allocators have used insurance linked securities for more than two decades as a source of uncorrelated return.

The risk is real. A severe event can produce losses larger than the premium earned, and capital can be lost. Reinsurance returns are uncorrelated with financial markets, but they are not risk free.

Why bring it onchain

The asset class works. The plumbing around it is slow. Capital commitments take months, reporting arrives quarterly, collateral is verified through trustee statements and secondary liquidity is thin. The instruments are sized for tickets of USD 100 million and above, so smaller portfolios are left out.

Onchain settlement changes the operational layer without changing the insurance contract. Premiums and claims move in USDC in days rather than quarters. Net asset value is computed from accounting that anyone can inspect. Transfer restrictions are enforced by code. Issuance costs fall far enough that a portfolio of USD 25 million becomes viable.

Introduction

Yield Mechanisms

Earned premium

The core of a NextBlock vault's return is ceded premium. When a reinsurer cedes part of a portfolio to a vault, it pays the corresponding premium in USDC. The vault records that premium as unearned and earns it linearly over the coverage period. As premium is earned, it moves from the reserve into the vault's net assets and the share price rises.

Premium is contractual. Its amount and timing are defined by the treaty before the vault allocates capacity, which makes the income side of the vault predictable.

Claims

Claims reduce the return. When a covered loss occurs in a portfolio financed by the vault, the vault pays its ceded share of that loss in USDC, up to the capacity allocated to that portfolio. Reported claims are first reserved and then paid, and both steps are reflected in net asset value.

A vault with a good loss experience keeps most of its earned premium. A vault hit by a severe event can lose part of its capital. The Syndicate prices this at approval through an expected loss assumption, and the protocol limits it through allocation caps and concentration limits.

Fees

NextBlock charges a management fee of 1.5% a year on the value locked in the vault and a performance fee of 15% on returns above a 6% annual hurdle, subject to a high water mark. It also withholds an origination fee of 1% on ceded premium and a claims fee of 0.3% on settled claims. See Fees.

How the pieces fit

The yield of a vault is simple arithmetic:

Net yield = earned premium − claims paid and reserved − fees

There is no token emission subsidizing the rate, no leverage and no capital from new depositors paying earlier ones. The margin is the technical margin of an insurance portfolio, the same source of return the reinsurance industry has relied on for more than a century.

NextBlock targets a net yield to Liquidity Providers of 6 to 10% a year for its first vaults. The target is illustrative. Actual returns depend on loss experience, portfolio composition and the terms of each vault, and they can be negative.

Why this matters for a portfolio

For an allocator, the value of the asset class is the correlation, not only the level of return. A motor or property portfolio does not lose money because credit spreads widen or crypto prices fall. A reinsurance vault adds a return stream driven by real world events to portfolios that are otherwise exposed to the same financial cycle.

Introduction

Protocol Status

At a glance

• Network: Base Sepolia staging, live since June 2026
• Codebase: 23 Solidity modules on OpenZeppelin v5, 558 tests across 42 suites including stateful invariants
• External audit: not yet performed, required before any mainnet deposit
• Governance: phase one live, timelock with a multisig Safe as proposer
• Regulatory: registration under the DARE Act of The Bahamas in preparation
• Mainnet pilot: targeted for Q4 2026 to Q1 2027, after the audit

NextBlock publishes what is real and what is not. Institutional counterparties will read the repository anyway, and the protocol is easier to trust when its gaps are written down.

What is live and real

USDC flows

Deposits, ceded premium transfers, redemptions and claim payouts move real token balances through the contracts. Staging uses a test USDC token. Mainnet will use native USDC on Base.

Compliance gate

The ComplianceRegistry enforces the whitelist, KYC expiry, jurisdiction codes and block flags onchain, on every share mint, transfer and burn.

Underwriting lifecycle

Portfolio registration, Syndicate approval, allocation within concentration limits, unearned premium accounting, the redemption queue and the claims path with dispute windows and committee approval all run onchain.

Confidential documents

Treaty and bordereau files are stored in private storage. Only their keccak256 fingerprint is anchored onchain.

What is still advisory

Path to mainnet

For Liquidity Providers

Introduction

Liquidity Providers finance NextBlock vaults. They deposit USDC, receive nbRV at net asset value, and earn the premium ceded by the reinsurers whose portfolios the vault supports. In exchange they bear the underwriting risk of those portfolios, within the limits set by the vault.

The section explains how capital enters and leaves the protocol. It covers who is eligible and through which path, how a deposit works, how redemptions are processed through periodic windows, how the capital of a vault is structured between allocated capacity and a liquidity buffer, and what fees apply.

NextBlock is built for institutional capital only. The first Liquidity Providers are crypto-native funds and market participants already operating on Base, who understand onchain vaults and want real yield that does not depend on leverage or emissions. Banks, asset managers, family offices, captive insurers and insurance linked securities managers follow, through a path designed around their custody, documentation and reporting requirements.

Before depositing, every Liquidity Provider can see what it is buying: the portfolios financed by the vault, their structure, line of business and jurisdiction, the capacity allocated to each, the risk score produced by Wavenure and the vault's current net asset value.

For Liquidity Providers

Eligibility and Access Paths

Every NextBlock vault is permissioned. No wallet can hold nbRV without completing identity verification and being whitelisted in the ComplianceRegistry. There is no open, permissionless route into a vault, and there is no retail access.

Within that perimeter, NextBlock supports two operating paths. Both lead to the same vaults, the same share and the same compliance checks. They differ in how the institution onboards and how it moves money.

Digital institutional access

Designed for crypto-native funds, onchain asset managers and liquidity providers that already hold USDC on Base and operate their own wallets.

• Entity verification (KYB), beneficial ownership and sanctions screening
• Whitelisting of one or more operating wallets, with a KYC expiry date recorded onchain
• Direct USDC deposits into the vault through the NextBlock application
• Self-custody of nbRV in whitelisted wallets or approved venues

This path is the fastest to activate and is expected to provide the first capital behind each vault.

Regulated institutional access

Designed for banks, asset managers, pension and insurance allocators, family offices and corporate treasuries that operate under mandates requiring regulated counterparties, fiat settlement and qualified custody.

• Full KYB onboarding, including regulatory status and investor qualification
• Subscription documentation for the selected vault
• Fiat-to-USDC conversion through NextBlock's banking partner, with a complete audit trail
• Institutional multisig custody with whitelisted addresses
• Programmatic operation through an SDK and REST API for deposits, reporting and reconciliation

The institution does not need to interact with a smart contract directly. It works through counterparties and interfaces it already knows.

Eligibility

Liquidity Providers must qualify as professional, institutional or otherwise qualified investors under the rules that apply to them. Minimum subscription amounts are defined in the terms of each vault. Persons located in restricted jurisdictions cannot participate. See KYC and AML Policy and Restricted Jurisdictions.

For Liquidity Providers

Depositing into a Vault

A deposit converts USDC into nbRV at the vault's current net asset value per share. Deposits are synchronous: the Liquidity Provider knows the price and the number of shares it receives in the same transaction.

How a deposit works

Supported assets

Vaults accept USDC only. On mainnet this is native USDC on Base. Institutions that start from fiat convert through NextBlock's banking partner before depositing.

Deposit limits

Each vault has a total deposit cap set by governance, and may apply per-investor limits recorded in the ComplianceRegistry. A deposit that would exceed either limit reverts.

Fees

NextBlock charges no fee to deposit. Liquidity Providers pay Base network fees. Protocol fees accrue at vault level, see Fees.

For Liquidity Providers

Redemptions

Capital in a NextBlock vault backs real reinsurance cover. It cannot all be withdrawn on demand, because part of it is committed to portfolios whose coverage has not yet expired. Redemptions are therefore asynchronous: a Liquidity Provider submits a request, and the protocol settles requests pro rata at periodic windows, within the liquidity the vault has available.

Deposit versus redemption

How a redemption works

Pricing while a request is open

A request does not lock a USD value. Escrowed shares remain exposed to the vault until they are settled, and net asset value can change between submission and settlement, including because of claims.

Window frequency

Redemption windows are defined in the terms of each vault. As portfolios approach expiry and their allocated capacity is released, more liquidity becomes available to settle requests.

Secondary transfers

There is no open secondary market for nbRV. Shares can be transferred between whitelisted wallets, and a permissioned lending market allows a Liquidity Provider to borrow against its shares instead of redeeming. See Borrowing Against Vault Shares.

For Liquidity Providers

Vault Capital Structure

Every vault holds a single asset, USDC, and divides its capital into two parts with different jobs.

Allocated capacity

The largest part of a vault's capital is allocated to approved reinsurance portfolios. Allocated capacity is the amount the vault stands ready to pay on claims in each portfolio. It is ring-fenced per portfolio: a claim in one portfolio can only be paid up to the capacity allocated to that portfolio.

Allocations are proposed by the Allocator, approved within the limits set by the Syndicate and bounded by caps enforced in the VaultAllocator contract. See Allocation and Concentration Limits.

Liquidity buffer

A share of the vault is never allocated to risk. This liquidity buffer settles redemption windows and absorbs operational flows. A typical vault keeps 20% of its assets in the buffer, and the protocol does not allow the buffer to fall below 10%.

Reserves inside the vault

Vault accounting separates three reserve items from free capital:

• Unearned premium reserve. Premium received for cover not yet provided, earned linearly over the coverage period.
• Claim reserves. Amounts set aside for claims that have been submitted and are going through the dispute and approval path.
• Accrued fees. Protocol fees earned but not yet collected.

None of these items count toward the value of a share until they are released. This is what keeps net asset value honest while cover is still running.

What the vault does not do

The vault does not lend its USDC, does not use leverage and does not place capital in external yield strategies. Every dollar is either in the buffer, allocated to an approved portfolio, reserved or paid out.

For Liquidity Providers

Fees

NextBlock earns four protocol fees. Two are charged on the vault's capital and performance, two on the flows that pass through the protocol. The management fee accounts for about half of the total, so most revenue is recurring rather than transactional.

Management fee

The management fee accrues continuously on the total value locked in the vault and is recorded in vault accounting as an accrued fee. It is already reflected in the share price.

Performance fee

The performance fee applies only to the part of the net return above a 6% annual hurdle. The high water mark means that after a loss, no performance fee is charged until the vault recovers its previous peak. Crystallization dates are defined in the terms of each vault.

Origination fee

The origination fee is 1% of the gross written premium ceded into the vault. It is withheld when ceded premium is routed through the PremiumDistributor, so the reinsurer pays the premium agreed in the treaty and nothing on top.

Claims fee

The claims fee is 0.3% of each claim settled through the ClaimManager. It is charged to the vault at settlement, so the reinsurer receives the full amount due under the treaty.

Who pays and who is paid

All protocol fees reduce the vault's net assets and are borne by its Liquidity Providers. The cost of setting up and administering the reinsurer's SPV is borne by NextBlock. Where a third party acts as Syndicate on a vault, its compensation is paid out of NextBlock's fees under the vault terms, so Liquidity Providers do not pay twice.

Network fees

Deposits, redemption requests and claims are onchain transactions on Base and carry network fees paid by the sender.

Vaults and Curation

How Vaults Work

A NextBlock vault is a permissioned ERC-4626 contract that holds USDC, issues nbRV and finances one or more approved reinsurance portfolios. Each vault is an independent instance with its own Liquidity Providers, its own deposit cap, its own allocations and its own net asset value. A loss in one vault cannot reach the capital of another.

Vaults are deployed through the VaultFactory. Deployment is gated: only an authorized Syndicate can request a new vault, and the factory wires the vault to the shared registries, the compliance layer and the role system at creation.

Where risk and capital meet

Three parties meet inside a vault, and the protocol keeps their incentives separate.

The reinsurer brings the portfolio and pays ceded premium. It does not earn the vault's yield, because it has already kept the premium on its retained share. What it gains is capacity freed on its balance sheet and faster settlement.

The Liquidity Providers bring the capital and earn the premium, net of claims and fees. They bear the underwriting risk.

The Syndicate decides which portfolios enter the vault, on which terms and with which weight. It is paid for that work under the vault terms.

NextBlock operates the infrastructure and earns the protocol fees.

The life of a vault

Vaults and Curation

Syndicates

The Syndicate is the underwriting manager of a vault. The name comes from Lloyd's of London, where a syndicate selects risks, sets terms and manages the capital of its members. In a NextBlock vault the Syndicate plays the same part, with its powers written into the protocol and bounded by it.

In technical and contractual documents the role is called Underwriting Curator. It corresponds to the UNDERWRITING_CURATOR_ROLE in the protocol's role system.

What a Syndicate does

• Reviews portfolios submitted by reinsurers and decides whether they can enter the vault
• Sets the expected loss assumption for each portfolio at approval, using the Wavenure risk assessment as one input
• Activates approved portfolios and defines how capacity is split between them
• Publishes the vault offering terms seen by Liquidity Providers
• Monitors loss experience and stops new approvals when the vault should run-off

What a Syndicate cannot do

A Syndicate cannot move funds out of a vault, cannot pay claims, cannot change the whitelist and cannot exceed the caps and concentration limits set by governance. Claims are approved by the Claims Committee and paid by the vault. Capital only moves along paths the contracts define.

Who can be a Syndicate

NextBlock acts as Syndicate on its own vaults. Qualified third parties can also be authorized as Syndicates, typically brokers and underwriting managers who originate portfolios from their own relationships. A broker acting as Syndicate is paid for bringing and managing portfolios on vaults it originates, while its existing brokerage relationship with the reinsurer stays unchanged.

A Syndicate must complete KYB, be approved through governance and hold the role onchain before it can deploy or manage a vault.

Vaults and Curation

Allocation and Concentration Limits

Allocation decides how much of a vault's capital stands behind each portfolio. NextBlock separates the decision into roles and bounds each of them with limits enforced by the VaultAllocator contract.

How allocation works

Limits enforced onchain

Why the split of roles matters

The Syndicate sets strategy but does not execute allocations. The Allocator executes but only inside the Syndicate's parameters and the protocol's caps. The Sentinel can pause allocation if something looks wrong but cannot move funds. No single role can take a vault's capital and place it on a risk that has not been approved.

Vaults and Curation

Wavenure Risk Engine

Wavenure is the risk engine used by NextBlock to price and monitor reinsurance portfolios. It is developed by Wavenure, a company that already provides risk and portfolio analytics to banks and insurance companies in Italy, and NextBlock uses it under a licence agreement that covers the engine and its future integrations.

What Wavenure does

Given a portfolio's exposure data, loss history and treaty terms, Wavenure estimates:

• Expected loss, the input the Syndicate uses to set pricing terms at approval
• Solvency Capital Requirement, the capital a portfolio needs to withstand a severe year
• Incurred But Not Reported reserves, losses that have occurred but have not yet been reported
• Loss ratio trends, claims paid over premium earned, monitored over time
• Concentration, exposure by geography, peril, line of business and cedent

Wavenure also produces inputs for net asset value attestations and advisory assessments of submitted claims.

Advisory by design

Wavenure proposes. It never decides. Its outputs enter the protocol only through adapter contracts, and none of those contracts can approve a portfolio, allocate capital or pay a claim. The Syndicate sets the expected loss at approval. The Claims Committee approves claims. Onchain caps bound everything.

This separation is deliberate. If a model is wrong, the resulting loss is an underwriting loss, disclosed as such and bounded by allocation caps and the buffer. Accountability sits with identified roles, not with a model.

Model governance

Wavenure outputs are checked against the loss triangles and pricing supplied by the reinsurer and, where available, against catastrophe model output. The Syndicate can override any output. The model governance document, including data sources and backtesting, is shared with counterparties under NDA.

Vaults and Curation

Borrowing Against Vault Shares

Redemptions in a NextBlock vault settle at periodic windows. For a Liquidity Provider that needs liquidity between windows without giving up its position, the protocol includes a permissioned lending market that accepts nbRV as collateral.

How it works

The lending market is an isolated market. A whitelisted Liquidity Provider deposits nbRV as collateral and borrows USDC up to a loan-to-value limit set in the market parameters. Collateral is valued through a guarded net asset value per share attestation that checks for stale or anomalous inputs before it is used.

Markets are created through a factory with explicit parameters. Every participant, lender and borrower, must pass the same compliance checks as the vault, because nbRV cannot move to a wallet that is not whitelisted.

Risks

If the value of nbRV falls, for example after a large claim, the loan-to-value of a position rises and the position can breach the market collateral limit and be closed out under the market rules. Borrowing adds leverage to an underwriting exposure. Liquidity Providers should size positions with that in mind.

For Reinsurers

Introduction

NextBlock gives reinsurers access to institutional capital for defined portions of their portfolios, with settlement in USDC and without changing how they underwrite or handle claims.

A reinsurer contributes a portfolio into a dedicated special purpose vehicle that it continues to own. NextBlock sets up and administers the vehicle, registers the portfolio onchain and finances it through a vault funded by whitelisted Liquidity Providers. The reinsurer pays ceded premium into the vault and receives claim payments from it. Underwriting, policy administration and claims assessment stay with the reinsurer, which remains the licensed party.

Two reasons reinsurers come to NextBlock

Smaller and mid-sized reinsurers come for cost. Catastrophe bonds and sidecars are built for tickets of USD 100 to 200 million. Below that size, legal, structuring and settlement costs make a cession uneconomic. A NextBlock vault makes a portfolio of USD 25 million viable, with issuance costs borne by NextBlock.

Large reinsurers do not lack capital. They come for leverage and speed. Ceding a slice of a book to a vault frees capacity that can be used to write more business on the same balance sheet, and USDC settlement turns premium, collateral and claim flows into movements measured in days instead of quarterly reconciliations.

What stays the same

The reinsurer keeps its licence, its underwriting guidelines, its claims team and its brokers. The cession is documented in a traditional reinsurance agreement governed by law and arbitration clauses the parties agree. The reinsurer does not need to learn Solidity. It signs a treaty and uses a dashboard.

What changes

Premiums and claims settle in USDC. Portfolio terms, premium accounting, claim status and the capital backing the cover are visible in real time rather than in periodic statements. Capital is committed before cover starts and remains ring-fenced for the portfolio.

For Reinsurers

Portfolio Eligibility

NextBlock finances portfolios that can be described precisely, monitored through regular data and settled without ambiguity. Before a portfolio reaches a Syndicate for approval, NextBlock evaluates it on five dimensions.

What we evaluate

• The reinsurer's licence, regulatory standing, financial strength and solvency position
• The treaty structure, limits, exclusions and how premiums and losses are shared
• Loss history over five to ten years, reserving methodology and loss ratio stability
• Exposure data by geography and peril, and catastrophe model output where relevant
• The quality, format and frequency of premium and claims bordereaux

Pilot profile

The first vaults focus on portfolios whose cash flows are simplest to account for onchain:

Lines of business

NextBlock prefers risks with clear triggers, measurable exposure and reliable reporting. Parametric covers such as flight delay and hurricane indices, catastrophe excess of loss, directors and officers liability, insurance linked securities and selected surety are suited to the model. Single retail policies are not.

What we do not finance

NextBlock does not finance unlicensed programmes, exposures that cannot be modelled, portfolios without verifiable loss history, or structures where the legal right of the vault to its share of premium and its limit of liability cannot be documented.

For Reinsurers

Onboarding Path

A reinsurer moves from first contact to live settlement through seven steps. Legal work runs in parallel with technical setup, and nothing goes live until four gates have closed: KYB on the reinsurer, data quality, actuarial review and legal documentation.

For Reinsurers

Documentation Requirements

Every document a reinsurer provides has a precise destination in the protocol. The table below lists what NextBlock requests, what it checks and where the result lands.

For Reinsurers

Reporting and Reconciliation

NextBlock combines the reporting a reinsurer already produces with continuous onchain accounting. The reinsurer keeps sending bordereaux. The protocol turns them into attested records and keeps the vault's accounts current between reconciliations.

Bordereau attestation

Premium, policy and claims bordereaux are submitted at the frequency agreed in the term sheet. The file is parsed, stored privately and fingerprinted, and the submission is recorded as an optimistic attestation in the BordereauOracle.

An attestation opens a liveness window of two days. During the window the Sentinel can dispute it. A disputed attestation is resolved by the Claims Committee. An undisputed attestation is finalized at the end of the window and becomes part of the portfolio's record.

Premium accounting

Ceded premium is transferred in USDC through the PremiumDistributor into the vault, where it is recorded as unearned premium and earned linearly over the coverage period. Every transfer is exact to the unit: the protocol checks that the USDC received equals the USDC allocated.

What the reinsurer sees

• Capital allocated to its portfolio and capacity still available
• Premium received, premium earned and unearned premium outstanding
• Claims submitted, disputed, approved and paid, with their receipts
• Per-portfolio settlement statements built from indexed onchain history

Periodic reconciliation

At agreed intervals, typically quarterly, NextBlock and the reinsurer reconcile the accounts: premium transferred against premium due, and claims paid against claims due under the treaty. Any difference is settled with a balancing payment and recorded, so the onchain history and the reinsurer's ledgers close on the same figures.

For Reinsurers

Regulatory Framework

Licensing and regulation

NextBlock Group Ltd is a company incorporated in the Commonwealth of The Bahamas. It is preparing its registration with the Securities Commission of The Bahamas under the Digital Assets and Registered Exchanges Act (DARE Act), in two capacities.

Token Issuer

Covers the issuance of vault shares and the protocol-level instruments linked to them. The share is designed as a restricted security offered to institutional investors only.

Digital Asset Business

Covers the operation of the protocol: vault management, compliance operations and the processing of deposits, redemptions, premiums and claims.

NextBlock's banking partner in The Bahamas, Equity Bank Bahamas, provides the fiat banking rails used to convert between USD and USDC.

Where the licences sit

Why The Bahamas

The Bahamas and Bermuda sit close to where insurance linked securities capital is managed, along with the US East Coast. For NextBlock, a Bahamian home is co-location with its investors and a regulatory framework written for digital asset issuance and operations.

Expansion

Distribution in the European Union is not active. It is planned through MiCA-licensed partners and, after an operating track record under the DARE Act, through a NextBlock branch, to professional clients only. Access for US investors is described in Restricted Jurisdictions.

Reinsurance Framework

Supported Structures

The PortfolioRegistry records every ceded portfolio with its cedent, structure type, coverage limit, ceded premium, inception and expiry dates and the hash of its document bundle. The registry supports the structures most reinsurance programmes use.

Claim verification types

Each policy in a portfolio is also classified by how its claims are verified. The classification is set at registration and decides which claims path applies.

Starting with proportional and run-off

First pilots use closed proportional portfolios and run-off books. Their premium and claims cash flows are the most predictable, which makes onchain accounting and net asset value easiest to verify. Excess of loss and parametric vaults follow once the first vaults have a settlement history.

Reinsurance Framework

The Reinsurer SPV Structure

NextBlock does not take ownership of reinsurance portfolios. The reinsurer keeps ownership of a dedicated special purpose vehicle, contributes the portfolio into it, and the NextBlock vault finances that vehicle. A Liquidity Provider's share is a pro rata economic right on the net cash flows of the vehicle: premium earned, minus claims paid, minus fees.

How the structure works

Traditional collateralized reinsurance and NextBlock

What this means if NextBlock fails

NextBlock is the technology operator, not the owner of the portfolio and not the custodian of Liquidity Provider funds. The portfolio sits in the reinsurer's vehicle, the capital sits in the vault contracts, and the contracts continue to work without NextBlock's servers. Administrative keys sit in a multisig Safe behind a timelock.

Reinsurance Framework

Capital Segregation

NextBlock separates capital at three levels, so that a problem in one place cannot spread to another.

Between vaults

Each vault is a separate contract with its own USDC balance, its own shares and its own allocations. The VaultFactory creates independent instances. No function moves capital from one vault to another, and a loss in one vault has no effect on the net asset value of any other.

Between portfolios in a vault

Inside a vault, capacity is allocated per portfolio. A claim can only be paid from the capacity allocated to the portfolio it belongs to, and never above that amount. Concentration limits cap how much of the vault a single portfolio or a single cedent can use.

Between risk capital and liquidity

The liquidity buffer is never allocated to risk. It exists to settle redemptions and cannot be drawn below its floor by allocation.

Between the protocol and its operator

The protocol is non-custodial. NextBlock Group Ltd does not hold Liquidity Provider funds in its own accounts. USDC sits in the vault contracts and moves only along paths the contracts define: deposit, allocation, premium, claim payout, fee collection and redemption. The PortfolioRegistry, the allocator and the oracles hold no funds at all.

Controls that enforce segregation

• Stateful invariant tests prove on every build that USDC is conserved, no share is minted without backing, unearned premium stays within bounds, allocations respect caps and claim reserves remain solvent
• The vault is the final solvency check: it refuses any payout that its accounting cannot cover
• Risk-increasing configuration changes pass through a timelock and a multisig Safe
• The Sentinel can pause modules and block addresses but has no power to move funds

Reinsurance Framework

Claims and Risk Management

Claims procedure

NextBlock follows the claims discipline of traditional reinsurance and uses the protocol to make each step recorded, time-bound and verifiable. The reinsurer assesses the loss. The protocol checks it, gives stakeholders time to challenge it and pays it.

Risk appetite

Capital discipline

No leverage inside vaults, no external yield strategies, a liquidity buffer that never falls below 10% and payouts bounded by allocated capacity.

Pricing before exposure

Every portfolio carries an expected loss set by the Syndicate at approval. Capacity is not allocated to a portfolio that has not been priced.

Diversification

Concentration limits by portfolio and by cedent. Vaults can combine lines of business and jurisdictions within those limits.

Transparent risk

Liquidity Providers bear the underwriting risk and there is no external backstop. NextBlock states this plainly in every vault's terms.

Reinsurance Framework

NAV Methodology

The net asset value of a NextBlock vault is not a number the operator declares. It is derived from the vault's own onchain accounting, and every component can be inspected.

The NAV equation

NAV = USDC held by the vault − unearned premium reserve − pending claim reserves − accrued fees

NAV per share = NAV ÷ nbRV in issue

Because net asset value comes from internal accounting, sending USDC directly to the vault cannot inflate the share price, and no offchain service can set it.

Attested risk inputs

Alongside the accounting value, the NavOracle stores attested inputs from Wavenure: an independent view of the vault's value, risk scores and reserve estimates such as Incurred But Not Reported losses. The oracle accepts updates only from the Oracle role and applies two guards:

• Staleness guard. Inputs older than the configured window are rejected, and modules that depend on them stop acting on them.
• Deviation guard. If an attested value moves beyond the configured bound, the oracle pauses automatically and the Sentinel reviews the anomaly before activity resumes.

These inputs inform allocation decisions and Syndicate reviews. They never move funds.

Why this matters

Traditional insurance linked securities funds publish net asset value quarterly through an administrator. A NextBlock vault's value can be checked by any Liquidity Provider, auditor or regulator at any time, and changes caused by premium earned or claims reserved appear when they happen, not at quarter end.

Security and Verification

System Integrity Overview

At a glance

• Contracts: 23 Solidity modules, OpenZeppelin v5, Solidity 0.8.24, no upgradeable proxies
• Testing: 558 tests across 42 suites, including fuzz, integration and stateful invariant campaigns
• Continuous integration: 95% coverage floor, static analysis failing on high findings, gas regression checks, full NatSpec coverage
• Governance: timelock holding the Owner role, multisig Safe as proposer and executor
• Compliance: onchain transfer hook on every share movement
• External audit: planned before mainnet, not yet performed

Control principles

NextBlock is designed so that the failure of one key, one data feed or one operator cannot reach Liquidity Provider capital. Three constraints hold the design together.

No single point of control

Every risk-increasing change is scheduled through a timelock and executed by a multisig Safe. No single key can change caps, grant roles or redirect funds.

Separation of judgement and money

The roles that assess, approve and pay are held by different parties. The risk engine advises, the Syndicate approves portfolios, the Claims Committee approves claims and the vault pays. Emergency powers only reduce risk.

Accounting that cannot be declared

Share price, premium earning and claim reserves derive from contract logic and the block clock. No offchain service or signer can set the value of a share.

Protection by design

Security and Verification

Governance and Roles

Authorization in NextBlock lives in one contract, ProtocolRoles. Every module checks permissions against it. There are no whitelists with authority in the frontend or the database.

Protocol roles

Timelock and Safe

The Owner role and the role administrator are held by a timelock contract. A multisig Safe is its proposer, executor and canceller. Every risk-increasing action follows the same sequence: schedule, wait for the delay, execute. Pending operations are visible onchain during the delay.

Governance phases

Security and Verification

Oracle and Data Safeguards

External data enters NextBlock through three channels: attested risk and valuation inputs, bordereau attestations and claim assessments. None of them can move funds on its own.

NavOracle

Stores attested net asset value and risk inputs published by the Oracle role from Wavenure outputs. The publisher uses a canonical serialization and authenticated submission, and fails closed when inputs are incomplete. Staleness and deviation guards reject old data and pause automatically on anomalies until the Sentinel has reviewed them.

BordereauOracle

Records premium, policy and claims bordereaux as optimistic attestations. Each attestation carries a two-day liveness window during which the Sentinel can dispute it. Disputes are resolved by the Claims Committee. Attestations have no direct economic effect: they document what was reported and when.

AIAssessor

Stores advisory claim assessments: a score, an anomaly flag, a recommendation and the hash of the source data. The contract is structurally unable to approve or trigger a payout.

AdapterRegistry

Holds an allowlist of optional adapters for external risk pools. Adapters must be activated through governance, cannot forward calls into core modules and cannot bypass vault accounting.

Roadmap

Security and Verification

Audits

NextBlock has not yet completed an external security audit. The repository states this openly, and no mainnet deposit will be accepted before the audit is complete.

Planned audits

Internal assurance already in place

• 558 tests across 42 suites, covering unit, revert, fuzz, integration, governance, fork and stateful invariant tests
• Ten invariant properties including USDC conservation, unearned premium bounds, allocation and coverage caps, claim reserve solvency and the absence of custody outside the vault
• Continuous integration with a 95% coverage floor, static analysis that fails on high severity findings and a gas regression ratchet
• Complete NatSpec documentation of the public contract surface, enforced in CI
• Maintained audit preparation and handoff documents in the repository

Audit reports will be published on this page when available.

Security and Verification

Responsible Disclosure

NextBlock welcomes reports from security researchers, including on staging deployments.

How to report

Submit a private security advisory on the NextBlock repository at https://github.com/antoncarlo/nextblock/security. You can also write to nextblock@financier.com. Do not open public issues for exploitable findings. Include the affected module or route, reproduction steps and the impact you observed.

What happens next

The engineering team acknowledges the report, reproduces it and agrees a remediation plan with the researcher. Once fixed, the resolution is documented in the repository.

Scope

Smart contracts, the NextBlock application and its server routes, and the onboarding pipeline. Findings that depend on compromised administrator keys, social engineering or third party services outside NextBlock's control are out of scope.

Bug bounty

A funded bug bounty programme will open with the mainnet launch. Its rewards and rules will be published here.

Technical Resources

Frequently Asked Questions

What is NextBlock?

NextBlock is an institutional protocol on Base for tokenizing reinsurance portfolios. Reinsurers contribute portfolios into vehicles they own, NextBlock registers them onchain, and permissioned vaults funded by institutional Liquidity Providers finance them in USDC.

Is NextBlock a reinsurer?

No. NextBlock is a technology platform and does not underwrite on its own account. Underwriting and claims handling stay with the licensed reinsurer.

What is nbRV?

nbRV is the share of a NextBlock vault. It carries the vault's net asset value, is minted on deposit and burned on redemption, and can only be held by whitelisted wallets.

Is nbRV a stablecoin?

No. nbRV is not pegged to USD. Its value moves with the vault's premium income, claims and fees.

Where does the yield come from?

From ceded reinsurance premium earned over the coverage period, minus claims and fees. There are no token emissions, no leverage and no external yield strategies.

What return can a Liquidity Provider expect?

The first vaults target a net return of 6 to 10% a year. The figure is illustrative, not guaranteed, and returns can be negative in a year with large losses.

What are the fees?

A 1.5% a year management fee on the value locked in the vault, a 15% performance fee above a 6% hurdle with a high water mark, a 1% origination fee on ceded premium and a 0.3% fee on settled claims. There is no deposit or redemption fee.

Who can invest?

Institutional and qualified investors that complete KYB and are whitelisted onchain. There is no retail access.

How do I exit?

Through the redemption queue, which settles requests pro rata at periodic windows within the vault's liquidity buffer. Between windows, a whitelisted Liquidity Provider can transfer shares to another whitelisted wallet or borrow against them in the permissioned lending market.

Who pays claims?

The vault pays approved claims in USDC from the capacity allocated to the affected portfolio. Liquidity Providers bear that loss. There is no external backstop.

Can the AI pay a claim or move funds?

No. Wavenure produces advisory assessments. Claims are approved by the Claims Committee after a dispute window, and payouts follow contract rules.

Can NextBlock move my funds?

No single party can. Vault capital moves only along paths defined in the contracts, and administrative actions pass through a timelock and a multisig Safe.

What happens if NextBlock stops operating?

The portfolio sits in the reinsurer's own vehicle, the capital sits in the vault contracts, and the contracts keep working independently of NextBlock's infrastructure.

Why Base?

The settlement asset is USDC and much of the institutional capital NextBlock targets already operates on Coinbase rails. Base's fee profile makes frequent accounting updates and redemption windows economical, and its native B20 standard adds compliance controls at the network level.

Is NextBlock regulated?

NextBlock Group Ltd is preparing its registration under the DARE Act of The Bahamas as Token Issuer and Digital Asset Business. The registration has not yet been granted.

Has the protocol been audited?

Not yet. An independent review and a public audit contest are required before any mainnet deposit. See Audits.

What data goes onchain?

Economic terms and document hashes only. No policyholder data and no bordereaux in clear. See Onchain Data and Privacy.

Technical Resources

Smart Contract Modules

The V1 protocol is written in Solidity 0.8.24 on OpenZeppelin v5, built and tested with Foundry. Each module has a single responsibility. Modules that do not need to hold funds hold none.

Roles and compliance

Registries

Vaults and capital

Claims and data

Lending and read layer

Offchain components

A Next.js application with server routes for onboarding, claims evidence and notifications; a subgraph indexing protocol events; scheduled keepers that settle redemption windows and finalize approved claims; and a database with row level security denying access by default.

Technical Resources

Token Standards and B20

Standards in use

Why ERC-4626 with a redemption queue

Deposits are synchronous because an institutional investor wants certainty on entry price and share count. Redemptions are asynchronous because capital deployed on risk cannot be returned instantly. NextBlock handles this with a dedicated redemption queue rather than changing the vault standard. ERC-7540 is reserved for V2, where treaty-level flows are asynchronous by nature.

B20 on Base

B20 is the native token standard of Base. It moves allowlists, blocklists, freeze and seize into the network itself rather than into each token's contract code. For a regulated issuer that means less custom compliance code to audit and the same policy semantics across every asset.

Adoption in two steps

What stays in NextBlock contracts

B20 does not replace everything. KYC expiry, per-investor limits, the vault deposit cap and the separation between the KYC Operator and the Sentinel remain enforced by NextBlock's own contracts.

Technical Resources

Onchain Data and Privacy

Reinsurance data includes information about insured parties. NextBlock keeps that data off the blockchain and puts only what is needed to verify the economics onchain.

What goes onchain

• Portfolio identifier, line of business, jurisdiction and structure type
• Coverage limit, ceded premium, inception and expiry dates
• The keccak256 hash of the document bundle and of each claim's evidence file
• A private metadata pointer that reveals nothing without access to NextBlock's private storage
• Whitelist status, KYC expiry and jurisdiction codes for wallets, with no identity data

What never goes onchain

Policyholder names or personal data, bordereaux in clear, treaty wordings, KYB documents and any personal identification data of Liquidity Providers or reinsurer staff.

How documents are handled

Bordereaux uploaded as Excel or CSV are parsed on the client side to prefill the onchain submission. The original file is stored in a private bucket and fingerprinted. Where a public record is useful, only a non-sensitive integrity manifest is pinned to IPFS.

Access control offchain

Onboarding data is stored in a database with row level security that denies all access by default. Server routes use credentials that never reach the browser and fail closed when misconfigured. Operator actions require a wallet signature verified against the operator's onchain role. The only public endpoint returns the status of an application, never its content.

Technical Resources

Treaty Gateway Roadmap

V1 tokenizes closed portfolios in batches. The Treaty Gateway, NextBlock's V2, connects a live treaty to the protocol and settles it every day.

Concept

Each treaty becomes an isolated onchain market. The cedent exposes an authenticated data interface to NextBlock. Every night an extraction pipeline collects the daily bordereau, signs it with a key held in a hardware security module and asserts it onchain through an optimistic oracle. When the liveness window closes without a dispute, the Treaty Gateway splits the premium, updates the risk position, accrues yield and updates net asset value in a single transaction.

Positioning

The Treaty Gateway is T+1 daily settlement, not block-by-block real time. Carriers run their systems in daily batches, and an optimistic oracle needs a liveness window. Daily settlement matches both while moving reconciliation from quarters to days.

Architecture

What it enables

• Near daily settlement of premium and claims
• Treaties as building blocks for structured vaults
• Compliant secondary transfers of treaty exposure between institutions
• Wavenure working inside the live treaty cycle rather than on periodic reports

Timing

The design document is complete and development is led by NextBlock's lead developer. The Treaty Gateway ships after the V1 mainnet pilot and its own independent audit.

Technical Resources

Glossary

Legal

Compliance

Compliance by design

NextBlock treats compliance as a property of the protocol, not a policy applied around it. The rules that decide who can hold a vault share, when and where are enforced by the smart contracts.

Identity and eligibility

Every Liquidity Provider, reinsurer and Syndicate completes KYB before receiving any onchain role or whitelist entry.

Two layers of AML control

Fiat flows pass through the banking partner, which applies its own identity, source of funds and sanctions checks. Onchain, the ComplianceRegistry applies whitelist, expiry, jurisdiction and block rules on every transaction.

Separation of duties

The KYB review happens offchain with a full audit trail. Whitelisting is a separate onchain act by the KYC Operator through a multisig. The Sentinel, not the KYC Operator, holds the power to block.

Ongoing monitoring

Sanctions screening is repeated on a monthly schedule. A KYC that expires causes transactions to revert until it is renewed.

Record keeping

Onboarding decisions are logged in an append-only audit trail. Onchain actions are permanently recorded on Base.

Security of operations

The application and its data follow a deny-by-default model: row level security on every table, server-only credentials, signed operator requests, private document storage and a published security model describing which boundaries are authoritative.

Pending items

Before mainnet NextBlock will appoint a Compliance Officer and a Money Laundering Reporting Officer as required for DARE Act registration, and connect a licensed identity verification provider to the onboarding pipeline.

Legal

KYC and AML Policy

Eligibility requirements

To deposit into or redeem from a NextBlock vault, every participant must complete identity verification and qualify as an institutional or otherwise qualified investor under the rules that apply to it. Verification covers:

• Legal existence, registration and good standing of the entity
• Ultimate beneficial owners and controlling persons
• Regulatory status and investor qualification
• Source of funds and source of wealth where required
• Sanctions, politically exposed persons and adverse media screening

Individuals cannot invest in their own name. There is no retail access to NextBlock vaults.

Onchain enforcement

Approved participants have one or more wallets whitelisted in the ComplianceRegistry, each with a jurisdiction code and a KYC expiry date. The contract checks these entries on every deposit, transfer and redemption. When verification expires, transactions revert until the participant renews it.

Reinsurers and Syndicates

Reinsurers and Syndicates complete the same KYB process, plus verification of their insurance or intermediary licences and financial standing, before receiving their onchain roles.

AML and sanctions

NextBlock screens participants against applicable sanctions lists at onboarding and on a recurring schedule, checks jurisdictions and monitors whether activity matches the information given at onboarding. Where requirements are not met, NextBlock can refuse onboarding, and the Sentinel can block an address onchain.

Data protection

Identity documents are held offchain in access-controlled storage. Onchain records contain only whitelist status, expiry and a jurisdiction code.

Legal

Restricted Jurisdictions

NextBlock vault shares are not offered to persons located, incorporated or resident in the following:

• Jurisdictions subject to comprehensive sanctions by the United Nations, the United States, the European Union or the United Kingdom
• Jurisdictions identified by the Financial Action Task Force as subject to a call for action
• Any jurisdiction where the offer of vault shares would require a registration, licence or prospectus that NextBlock does not hold

United States

US persons can participate only as verified accredited investors or qualified purchasers, through a private placement under Rule 506(c) of Regulation D. Accreditation is verified before the wallet is whitelisted, and US persons are subject to the transfer restrictions that apply to privately placed securities.

European Union and United Kingdom

Vault shares are not currently distributed in the European Union or the United Kingdom. Future distribution will run through MiCA-licensed partners and will be limited to professional clients.

Legal

Risk Disclosures

Participation in a NextBlock vault involves risk, including the loss of capital. The main risks are summarised below. The terms of each vault contain the full disclosures.

Underwriting risk

Vault returns depend on insured losses. A severe event or a deterioration in loss experience can reduce returns below zero and cause a loss of capital, up to the capacity allocated to the affected portfolios. There is no external backstop.

Model risk

Pricing and reserving rely on data provided by reinsurers and on actuarial and statistical models, including Wavenure. Data can be incomplete and models can be wrong.

Counterparty risk

Vaults depend on reinsurers paying ceded premium and reporting accurately. Reconciliation and dispute processes reduce but do not remove this risk.

Liquidity risk

Redemptions settle at periodic windows within the available liquidity buffer and can be partial. There is no open secondary market for vault shares.

Smart contract risk

The contracts can contain errors. The protocol has not yet been externally audited, and an audit does not eliminate this risk.

Oracle and data risk

Valuation inputs and bordereau attestations depend on external data, which can be delayed, disputed or wrong.

Governance and key risk

Administrative actions depend on multisig and timelock controls. Compromise or loss of keys could disrupt operations.

Regulatory and legal risk

NextBlock's registration under the DARE Act has not yet been granted. Laws and their interpretation can change, and the legal treatment of tokenized reinsurance interests is still developing in many jurisdictions.

Stablecoin risk

Vaults hold and settle in USDC. A loss of USDC's peg, a freeze by its issuer or a disruption of its redemption channels would affect the value and liquidity of vault assets.

Network risk

Vaults operate on Base. Network outages, congestion or changes to the network could delay transactions.

Legal

Important Notice

This documentation is provided for information only. It describes the NextBlock protocol and its intended operation. It does not constitute an offer to sell, a solicitation of an offer to buy or a recommendation regarding any security, token or financial product in any jurisdiction.

Any offer of vault shares will be made only through the subscription documents of the relevant vault, to eligible investors, in jurisdictions where the offer is lawful. Those documents prevail over this documentation.

Target returns, portfolio sizes, timelines and other forward-looking statements are illustrative. They are not guarantees and may not be achieved.

The protocol is in staging on Base Sepolia and has not been externally audited. NextBlock Group Ltd's registration under the Digital Assets and Registered Exchanges Act of The Bahamas has not yet been granted.

Nothing in this documentation is legal, tax, accounting or investment advice. Prospective participants should consult their own advisers.

Legal

Terms of Service

The Terms of Service govern access to the NextBlock website and application. They are published on the NextBlock website and prevail over this documentation.

Read the current version at https://nextblock.finance/terms.

The risk disclaimer that applies to the website and application is available at https://nextblock.finance/terms#risk. Protocol-level risks are summarised in Risk Disclosures.

For questions about the terms, write to nextblock@financier.com.

Legal

Privacy Policy

The Privacy Policy explains how NextBlock collects, uses and protects personal data submitted through the website, the application and the onboarding process.

Read the current version at https://nextblock.finance/privacy. The cookie policy is available at https://nextblock.finance/privacy#cookies.

How personal data is kept offchain, and what the protocol records onchain, is described in Onchain Data and Privacy.

For privacy requests, write to nextblock@financier.com.