Total Value Locked
$0 USD
annual rewards rate
lifetime rewards
lifetime covered
What’s a coverage pool?
A coverage pool functions as a form of insurance. It helps secure the network and is an opportunity to earn rewards.
Overview
- 1
Deposit your tokens
There is no minimum KEEP amount for your deposit and no minimum time lock. - 2
Withdraw deposit
Withdrawing is a two step action. First, you initiate your withdrawal. After that there is a 21 day cooldown period. During cooldown, your tokens are still accumulating rewards but are also subject to risk to cover for a hit. After 21 days, you can claim your token. - 21 day cooldown
- 3
Claim tokens
You have a 2 day claim window to claim your tokens and rewards. Your deposit and rewards will be sent in one transaction. If you do not claim your tokens within 2 days, your tokens will return to the pool and you will have to re-withdraw them.
what is it
A pool of capital that serves as external aid to maintain the 1:1 peg between tBTC and BTC deposits. Those who deposit into the pool are effectively underwriting a rare event where there's not enough money in the system to purchase BTC.
how it works
Coverage pools serve as a ‘buyer of last resort’. A buyer of last resort is the buyer that will purchase enough tBTC when no-one else will, to make a depositor whole in the event liquidation if the stakers collateral is insufficient.
When coverage is demanded some part of the collateral pool must be sold to obtain enough of the covered asset to fulfill the claim. Liquidating the coverage pool fairly means selling a basket of assets, in a fixed ratio, with good price discovery. For this reason, collateral is liquidated using a Dutch auction.
becoming and underwriter
When you make a deposit into the pool, you become an underwriter by securing the network. Because you provide capital and put your funds to risk you earn rewards. The job of an underwriter is quite passive, you don’t need to monitor the network or run a node.
what to expect
As an underwriter you are entering into a position relative to tBTC, the asset that the coverage pool is backing, and you are exposed to insurance events (liquidation).
Due to the sound math of the Coverage Pools a liquidation event is extremely rare and considered a black swan event.
Triggers
- When ETH-BTC price drops and there is not enough ETH as collateral for a deposit and in the liquidation state and no buyer is buying the ETH bonded by the stakers, the Coverage Pool will sell KEEP to buy BTC and cover the peg.
- When no valid redemption signature is provided in the required time frame and the deposit enters the liquidation state and no buyer is buying the ETH bonded by the stakers, the Coverage Pool will sell KEEP to buy BTC and cover the peg.
how you earn
There are weekly rewards emissions. The rewards emitted are deposited in the Coverage Pool. Rewards are KEEP tokens.
They will be calculated based on a variable APY. You can withdraw you rewards alongside with your deposit in a single transaction. You can withdraw partial amounts of the deposit and rewards.
As long as you keep your tokens in the pool your rewards will be autocompounded and earn rewards as well.
About
- Coverage tokens (or covTOKENs) are ERC20 which reflect your share in the coverage pool. For each KEEP token deposited, you will get an amount of covKEEP that represents your share in the pool.
- To withdraw deposited tokens, you must have your covKEEP in the connected wallet.