Working Draft: Create an Insurance Pool and issue CVP tokens as rewards for LPs


I would like to build a draft for a PIP to give rewards for LPs who cover the Powerpool Protocol, on some insurance provider. I highly suggest this as smart contract risks are extremely complex, and it would help bootstrap a community of LPs who wish to provide protection in case of a currently undiscovered bug.

It would be unclear how we would reward this or build infrastructure around this in terms of rates and vesting. I do believe we have an opportunity to reward them via CVP and it would be beneficial for Powerpool providers like myself who would currently love to purchase smart contract insurance for this protocol.

Below are some rough ideas for each protocol as well as a pool to collect signal.

Nexus Mutual

  • Well known brand.
  • Existing Synergy with PIPT and likely governance integration for CVP holders.


  • Somewhat centralized.
  • Unclear process for adding a new Cover Pool.

Further Reading
Nexus Mutal


  • Fairly Decentralized (runs using Prediction Market pricing)
  • Part of the Yearn Ecosystem.
  • Likely Synergy with the Proposed YETI Pool.


  • Low existing liquidity.
  • Fairly new.
  • No current governance ownership path for CVP holders until/unless YETI finalization.

Further Reading
Understanding Cover Protocol
Cover Protocol Product Paper

My 2 wei:

Short term, let’s push for Nexus since we currently hold existing wNXM tokens and as far as I know, we can utilize our tokens in governance on their platform. After YETI is finalized, Cover LP rewards should be added.

  • Both Now
  • Nexus Mutual Now
  • Cover Now
  • Neither Right Now (Maybe Later)

0 voters

1 Like

Would propose also considering Bridge Mutual ($BMI) as a potential provider:

Bridge provides the most transparent and efficient p2p coverage platform, allowing anyone to reliably insure smart contracts, stable coins, and more.

Why Bridge Mutual:

  1. Decentralized - A decentralized and discretionary insurance application, allowing users to insure each other.
  2. Transparent - Blockchain-based, transparent code. Both claims assessment and investment of funds are on-chain and audit-able by the public.
  3. Fair - All claims go through a 3-phase voting process that is enforced with rewards and punishments, ensuring a thorough process for every claim.
  4. Disruptive - Bridge will replace the traditional insurance industry, which is unfair and litigious due to its lack of transparency and misalignment of incentives.
  5. Efficient- Bridge is more efficient than traditional insurance companies, and does not require branch offices, claims specialists, or agents to work.
  6. Quick- The turn-around time for claims and voting is predictable and is always under 6 weeks, regardless of the size of the claim.

Why we need them for PowerPool:

Smart contracts, stable coins and other crypto products are susceptible to hackers & failures, making it difficult for institutions to enter the market. Just take a look at the amount of money that was poured down the drain in 2020


I am CVP holder but also major Nexus staker…Stake DAO just got covered by Nexus…its not that hard. If PowerPool wanted to self-insure with their own pool, Nexus would offer re-insurance for excess. But the problem with having a large internal pool of CVP exposed to hacking risk is that it creates an overhang on the market since it could be dumped anytime to pay off a hack claim. A separate pool in Nexus is the way to avoid this. In fact, a central PowerPool DAO Treasury could choose to buy some NXM tokens and stake only in the pool covering PowerPool protocol abuse (hacking) risk, thereby also pocketing some yield. NXM are basically backed by a huge pool of ETH, with insurance premium yield on top.

1 Like

Hey, can you DM me on Discord or TG (DrGovernance) plz? Happy to chat about it

Also Nexus operate ‘shield mining’ programs as has been proposed above. This means that initial stakers in the Nexus pool covering PowerPool would also receive CVP incentives. It works to raise the profile of PowerPool among Nexus stakers who are almost all patient long term holders uninterested in liquidity or flipping.

Would be preferable if it was openly discussed here. I am not all familiar with this but I would be interested to learn and observe as the conversation develops. As can the rest if community that is interested :slightly_smiling_face:

The vote above needs to be retaken, as Cover is not what it was and no longer part of the Yearn ecosystem…exiled by Andre for ??? Summing up the above preliminary “Both” and “Nexus only” votes puts this clearly on the agenda