yCover

It is a prototype for a new tokenized insurance model. yCover tokens are liquidity tokens of different types that allow investors to provide crypto insurance pools with liquidity. yCover, is a non-KYC, collective insurance cover that Nexus Mutual undertakes. It consists of three components: yVaults Insurer, yVaults Insured, and yGovernance Order. Insurer yVaults maintains the properties used to cover claimants, the insured yVault maintains the claimants wanting to be insured, and Claim yGovernance represents the arbitration mechanism for insurance cases.

Insurer yVaults

This includes the assets shown in the capital pool that are insured by claimants. The yVaults Insurer behaves as follows:

  • Insurance providers deposit USDC with the yVault and receive yiUSDC in exchange.

  • yiUSDC represents the initial deposit of insurers, and essentially the capital pool of insurance.

  • Insurers receive initiaton fees and weekly premiums paid by insurees.

  • If a claim is approved, USDC will be paid out of the insurer yVault to the insuree (claimant).

Insured yVaults

Contains the assets insurees desire to obtain insurance on. The Insured yVaults work as follows:

  • If an insuree wishes to obtain insurance on USDT he or she would deposit USDT to the insured yVault, and in return receive yiUSDT.

  • yiUSDT represents the insurees deposit and can be withdrawn at any time.

  • The insured sum is the value of the asset in dollars at deposit. The insuree is charged a 0.1% initiation fee at deposit and ongoing 0.1% weekly fees.

Claim yGovernance

Represents the claim arbitration process. This process works as follows:

  • Insurees submit claims by staking the asset they received during deposit (yiUSDT).

  • Insurers vote with the assets they received during deposit (i.e., yiUSDC) on whether the claim is valid or not.

  • If a claim is approved the insurees receive the USDC and the insurers receive the yiUSDT from the insurees.

  • The voting period is three days, requires 33% approvals to pass, and can be voted with 25% of the voting power.

  • Any tokenized ERC-20 token can be insured. Base assets (LINK, ETH, etc. ) or composite asets such as aLINK or yaLINK can also be insured.

  • If insurance providers deny valid claims insurees will no longer use the system and ultimately make it unprofitable for insurance providers.