About

COVER Protocol provides peer to peer coverage with fungible tokens. It allows DeFi users to be protected against smart contract risk and lets the market set coverage prices as opposed to a bonding curve.

History

Cover Protocol was founded by Alan, one of the co-founders of SAFE. As the initial launch of SAFE was immature, the team rebuilt the protocol from scratch and rebranded it as COVER.

COVER Protocol allows DeFi users to protect against smart contract risk. It stabilizes the turbulent DeFi space by instilling confidence and trust between protocols and their users. At the core of Cover Protocol are the fungible cover tokens. Fungible cover tokens are created when a user deposits collateral into a Cover smart contract. Each Cover contract specifies the protocol to be covered (ie Curve), the preferred collateral (ie DAI), the amount to deposit, and then the expiration date of coverage.

The fungible cover tokens are maintained on a 1:1 basis with their collateral. For each DAI deposited, the user receives 2 tokens, a CLAIM token, and a NOCLAIM token. The NOCLAIM token represents rights to receive the deposited collateral in the event that a claim payout is NOT awarded during the designated coverage period. The CLAIM token represents a right to receive the deposited collateral (or a fraction thereof) in the event that a claim payout is awarded by the claims management process.

Cover Protocol merged with Yearn on 28 Nov 2020, more details can be found here.