Nelson is a machine, a beast, a myth, a legend, a bot, he/she/it/them shall not be named and is the epitome of fairness and objectivity.
Nelson is the clever Pineapple bot helps us to:
a) Take a claim amount
b) Rip it up in to tiny digestible pieces
c) Allocate it to the wallets of community members
How does it work?
It takes numerous factors into account. Who the claimant is connected to, who you are connected to. How much risk you add to the system. How much risk everyone adds to the system. And a few factors that is our "secret sauce". Based on this everyone is allocated a share of the claims.
How do I know it is fair?
1 - We have no incentive for it not to be fair
Since we do not profit by keeping unpaid premium, we have no incentive for the Nelson to be unfair.
2 - Science and Mathematics
We have run numerous simulations using actuarial models. These simulations were run at numerous community sizes,claims sizes and connectivity states.
And the results were astounding: We really are very proud of Nelson and the complexion it manages to deal with.
For those nerds like us who are interested in the result:
The maximum deviation went deep into decimal places (0.000029651 was the difference between the highest and the lowest outlier). And if you are being allocated R12 000 of claims a year the biggest difference in fairness between the most disadvantaged and the most advantaged will be R0.36 for the entire year.. And that is using the 2 biggest outliers!! We think that is pretty amazing taking into account the complexity of groups (everyone creating their own connection list rather than fixed pools) and the complexity of risks.
Which basically means this. Nelson is 100% fair and deviation is caused by rounding differences.