Cover Protocol Coin Price & Market Data
Cover Protocol price today is $229.57 with a 24-hour trading volume of $32,861,924. COVER price is down -4.9% in the last 24 hours. It has a circulating supply of 79 Thousand COVER coins and a total supply of 82 Thousand. If you are looking to buy or sell Cover Protocol, Binance is currently the most active exchange.
What is COVER?
Cover is the governance token for Cover protocol. It also plays a vital role in the claim management process.
What is Cover Protocol?
Cover Protocol is a peer-to-peer insurance market, where the way it operates is more similar to prediction market. Unlike other insurance protocols, the governance token is not used for underwriting risk.
To bootstrap coverage for a new protocol, market makers will need to be incentivized to stake collateral of DAI/yDAI to mint CLAIM and NOCLAIM tokens. All series covers a specified protocol and have a specified expiry date. During the expiry date, either CLAIM or NOCLAIM will have the full claim to the collaterals.
For example, if 100 DAI is used to provide coverage for Compound protocol until an expiry date, it will yield 100 CLAIM and 100 NOCLAIM tokens. On the expiry date, if there is a valid claim event, every CLAIM token will receive 1 DAI while NOCLAIM token will expire worthless. The converse is true if there is no valid claim event. In this case, every NOCLAIM token will receive 1 DAI while CLAIM token will expire worthless.
Who are the users of the Cover Protocol?
Users of the protocol can be split into 3 types - Market Maker, Coverage Provider, and Coverage Seeker.
Market Maker (MM)
A MM provides liquidity in both CLAIM and NOCLAIM tokens against DAI/yDAI. This is done in Balancer pools and ensures that coverage tokens are liquid and accessible for the market. MM mainly earns trading fees from the pools and earns the shield mining rewards. Shield mining rewards refers to the extra rewards offered by either the Cover protocol itself in terms of COVER tokens or the covered project’s native tokens to increase liquidity.
MM provides an important service as without them, the coverage tokens would be very illiquid which makes it difficult for people to purchase coverage and stay protected.
A coverage provider is a participant who deposits collateral to mint NOCLAIM/CLAIM tokens and sells their CLAIM tokens on the market. A coverage provider would do this if they are confident in the security of the protocol. Coverage providers can be the protocol themselves seeking to make coverage cheaper for their users by lowering the price.
Currently only smart contract risk is covered.
A coverage seeker is a user that wants to buy insurance or coverage for a smart contract protocol. To seek coverage, users may follow these steps:
Choose the protocol to have a cover on.
Choose the CLAIM token. There is always only one active CLAIM token for each expiration date. Click the BUY button on the specific expiration date.
After clicking the buy button it will be redirected to Balancer Swap. This is where users will swap DAI/yDAI for the specific Coverage Token. Each CLAIM token is eligible up to 1 DAI/yDAI in the event of an accepted claim. So if the user wants to have a coverage amount of $100, purchase 100 CLAIM tokens. Click Swap.
How is the coverage priced?
The price of cover (CLAIM token) is based on the price quoted in the Balancer pool, subjected to supply and demand of the CLAIM and NOCLAIM tokens in the Balancer pool.
How to claim?
Select the protocol to file a claim against.
Choose the Date and Time the incident occured (Must be within 3 day prior).
There are two options:
- Regular claim: A regular claim which is 10 DAI and multiplies each time a claim is submitted by any user. This will go to the community to vote on and if valid will move to the Claim Validity Committee (CVC) for a final decision.
- Force claim: A force filed claim can be submitted for 500 DAI and this will be sent to CVC directly for a decision and bypass the community voting. CVC is formed by smart contract auditors.
The fee for the regular or force claim will be refunded if the claim is approved.
Has Cover ever paid out claims before?
Yes! In the case of the hack of Pickle Finance in Nov 2020, a total of 282,035 DAI was redeemable for the CLAIM token purchased.
Can I buy the cover without KYC?
Buying the CLAIM token through Balancer protocol does not require KYC.
Cover was hacked in December 2020 in an infinite printing scheme. The exploiter has cashed out over $4 million including about 1,400 ETH, one million DAI and 90 WBTC. The attacker earlier created 40 quintillion COVER tokens and sold $5 million worth of them. More than $3 million has been returned.