Why the World Needs Karsha

Pana DAO
4 min readJun 22, 2022


The water of the sea received by the clouds is always sweet — Acharya Chanakya

There are so many tokens and cryptocurrencies; why do we need another token? What is the bull case for Karsha that differentiates it in the rest of the DeFi market? We want to make our value proposition clear — we are a different protocol that has something special to offer crypto-natives and the rest of the world.

The World Needs Digital Scarcity

To set some broad context, there are over 4 billion people today who will never have access to real-world assets that they can buy and invest in. The only way humanity can sustainably create wealth for everyone is to place scarce digital assets on equal footing with real-world assets. Real-world assets are by definition limited and through the combination of tokens and NFTs, we have created scarce, liquid digital assets for the Pana protocol that are yield-bearing vehicles. DeFi protocols open the door to asset ownership for the underserved and improve diversity in the world economy.

Insurance is Essential to Enable Risk Taking

The same 4 billion people who do not have the ability to acquire assets do not have access to life preserving insurance. By offering parametric policies, we can scale insurance in a manner never successfully executed before — this is because we do not need to interact directly with everyone (which is a requirement with traditional covered insurance). Instead, we payout using smart contracts that are triggered when an event occurs. In other words, there are no classic insurance costs, like the cost to underwrite or assess personalized situations. Everyone is paid algorithmically.

Importantly, Pana DAO creates its own parametric smart contracts and leverages real-world scenarios that trigger a payout. Karsha plays an important role in these tokenomics by being both an incentive and a governance token that empowers participants to have a voice in the design of Assurance NFTs.

Because Pana DAO’s tokenomics are generically designed to facilitate any kind of event, Assurance NFTs also act as a form of generalized crypto insurance. When you invest in an Assurance NFT, you receive an equivalent amount of Karsha in the form of a bond that vests inside your NFT. As with any project, the market price of Karsha will follow an S-Curve set by the market. When we create parametric smart contracts that are periodically triggered by natural events, it provides opportunities to have the protocol buy-back Assurance NFTs at the original principal price plus a premium. If the total value of Karsha in your Assurance NFT is lower than the buy-back price, the parametric event acts as an option to restore your investment from an unexpectedly low Karsha price because the DAO buys your Assurance NFT back at the original price plus a premium.

NFTs Represent the Best Kind of Self-Sovereignty

By using NFTs as the primary investment vehicle, we offer the owner the ability to monetize their NFT however they wish. Because we disaggregate the treasuries for each NFT collection, it ensures maximum transparency. You can see the share of the treasury associated with each NFT (i.e. how much of the treasury you and others have claim on). And even more importantly, the parameters for the parametric smart contract attached to your NFT.

To create digital scarcity, we initiate and expire Assurance NFT collections, each with different parameters, some with more frequent/favorable buy-back parameters than others. As time passes and value accrues in a treasury, the more scarce the associated NFTs become. This is irrespective of the Karsha that has accrued behind each NFT.

As a crypto-native owning an Assurance NFT, you have the opportunity to buy and sell (in OpenSea and other NFT marketplaces) the future yield AND buy-back value of your NFT. For non-crypto natives, they can burn their NFT at any time and receive the Karsha they’ve accumulated since purchasing the policy (this is a one-time action) or wait for the parametric event to trigger a buy-back. All participants across the Assurance NFT spectrum benefit from these decisions without being coerced into an unfavorable position.

The Crypto Community Needs Real-World Use-Cases

For crypto protocols to survive long-term, they need sustainable revenue. Just like blockchains need issuance to guarantee security, protocols need revenue to sustain operations. In Pana DAO’s case, our operating revenue comes from those buying bonds (Assurance NFTs use bonds behind the scenes) — when an Assurance NFT expires, Pana DAO takes a small commission. This creates an incentive to build Assurance NFTs that are attractive and faithful to a participant’s insurance needs.

Over the long-term, our protocol is not limited to the DeFi community. By taking our product off-chain as insurance, the revenue still accrues to Assurance NFT collections from each owner of a policy. This brings fiat on-chain and maintains the health of the Pana protocol. Subsequently, this revenue supports the APY on Karsha rebases and the growth of NFT collection treasuries. These types of real-world use-cases are what brings crypto mainstream.


While we are initially launching with a simple token launch, bonding and a master treasury, the medium and long-term plans for Pana DAO are innovative and unique. We have a strong advisory team, a development team with insurance experience and a unique combination of tokenomics (please read our Gitbook) that are built to become a primary investment vehicle for crypto-natives and a lifesaving creator of risk abatement for the underserved. It’s rare you can create this many wins in a single product and when it happens, it’s profoundly heartening. It’s time to bring democratized insurance to the masses.

A Humble Mission to Serve the Underserved. A Bold Goal to Provide Insurance to Everyone.



Pana DAO

Pana DAO is the first crypto protocol built to facilitate parametric insurance using a model similar to the time tested Lloyd’s of London syndicate model