Coverage Pools
Coverage Pools lock liquidity providers' funds as insurance collateral for a fixed period. If a policy event occurs, collateral from the pool is used for payout to the insured protocols. Coverage providers are given pool tokens (plTokens) representing the locked funds and yield premium earned from payments and other rewards in exchange for depositing tokens in the pools.
The tokens deposited by liquidity providers will provide an asset base that will at times be above the minimum liquidity and solvency requirements. The protocols have access to open-market investors who can offer liquidity in exchange for attractive incentives.
The crowdfunded policies will be available to both DeFi protocols and CeFi platforms. Policyholders may customize their insurance policies based on individual risk appetite and asset classes. Coverage pools comprehensively address the liquidity needs currently inhibiting the growth of DeFi insurance.
Advantages of our coverage pools include:

Premium Payouts

Basic premiums are set in policies, paid in stablecoins or ETH, and distributed to holders of plTokens. These tokens can be traded in secondary markets, allowing for users to easily make their staked assets liquid.

STDY Token Rewards

Coverage providers will earn Steady State's native governance token, STDY. STDY provides holders privilege in key protocol voting decisions which shape the direction of the Steady State protocol. Users with larger STDY token holdings have a greater influence on the decision-making process.

Protocol Token Rewards

Policyholders can choose if they'd like to distribute their native token to coverage providers for additional incentives. This flexibility offers an option that attracts more investors and increases interest in mutually beneficial relationships.

Collateral Reinvestment

At the policyholder's discretion, the collateral in coverage pools may (at the policyholder's discretion) be reinvested into safe yield-bearing protocols such as AAVE or Compound. Returns from these reinvestments may either be passed on to coverage providers or go towards paying down the initial premiums. This creates an additional opportunity for risk-tolerant investors with minimal liquidity requirements.
Last modified 1mo ago