Cover Protocol <> SushiSwap - Coverage Collaboration

Summary

With an increase in security breaches in smart contracts and the crypto space as a whole, it is indeed a scary time for us all. This proposal has two parts that will help build a synergistic relationship between SushiSwap and Cover Protocol:

  1. An incentivized COVER-ETH SushiSwap pool.

  2. SushiSwap uses an allocation of its treasury to help provide exploit protection to its community. Coverage would be provided in the event of a hack, bug, exploit or economic manipulation attack.

We believe SushiSwap’s vision aligns very well with Cover Protocol’s vision; both are innovative, growth-minded and community driven projects that put security first.

Who Are We?

Cover Protocol is a protocol that is focused on protecting and covering the DeFi community in the unfortunate event of a hack, bug, exploit and or economic manipulation attack. We provide coverage on smart contracts for anyone that needs it. Our coverage does not require KYC, is fungible, infinitely scalable and the price of coverage is determined by the market.

Proposal Details

  1. Create a COVER-ETH pool on SushiSwap which will be incentivized by Sushi Token at a 0.1x or 0.2x multiple. Cover Protocol will create its own farm where users can deposit COVER-ETH sushi farm tokens to earn COVER token as well. A 3 to 6 month pool may be a good place to start.
  • This will help drive more liquidity towards SushiSwap along with trading fees by making SushiSwap the defacto place to trade COVER token… It will also allow the SushiSwap Community to earn Cover Tokens.

  1. Allow for the treasury to allocate a portion of its funds towards being a market maker and/or coverage provider by minting CLAIM and NOCLAIM tokens and providing liquidity with those tokens. In order to make the price of coverage on SushiSwap as affordable as possible, we recommend that SushiSwap become a coverage provider or market maker. This has the additional benefit that the treasury will gain financially as long as there is no exploitation on SushiSwap. We leave it up to the community to determine how much liquidity to provide.

Benefits of coverage provider :

  • Show confidence in your project’s security.
  • Earn premium(s) by selling CLAIM tokens.
  • Cheap coverage opportunities for your community to stay protected.
  • Earn $COVER for staking NOCLAIM LP BPT tokens.
  • Earn balancer fees by providing liquidity in the pool(s).
  • Redeem collateral back as long as there is no claim.
  • The $COVER token is accumulated by those providing liquidity, providing coverage and participating in $COVER shield mining. This means the protocol and its users can have a say in Cover Protocol’s governance and the future of coverage in DeFi.
  • Incentivize your own token as well!

Benefits of market maker :

  • Cheap and low slippage coverage for your community to stay protected.
  • Earn $COVER for staking CLAIM and NOCLAIM LP BPT tokens.
  • Earn balancer fees by providing liquidity in the pool(s).
  • Redeem collateral back as long as there is no claim.
  • The $COVER token is farmed by those providing liquidity, providing coverage and participating in $COVER shield mining. This means the protocol and its users can have a say in Cover Protocol’s governance and the future of coverage in DeFi.
  • Incentivize your own token as well!

Additional Information:

COVER-ETH Pool Length :
  • 3 months
  • 6 months

0 voters

COVER-ETH Pool Multiplier:
  • 0.1x
  • 0.2x

0 voters

Allocations to coverage from the treasury:
  • $100,000
  • $250,000
  • $500,000
  • $1,000,000
  • $2,000,000
  • $3,000,000
  • $4,000,000
  • $5,000,000

0 voters

8 Likes

great proposal. do it asap!

2 Likes

One suggestion: Instead of building a completely separate farming pool to earn COVER, I would prefer you to provide an opportunity to farm both.
You could take inspiration from the contract implementations of the parasitic projects like Harvest or Dracula but instead of selling the SUSHI rewards adding COVER rewards on top.

2 Likes

Hi Keno,

With the COVER-ETH pool they will have to stake that SLP token in our protocol to earn/farm the $COVER token. This proves they are providing liquidity on SushiSwap so they would earn COVER from our platform. They would be earning Sushi on SushiSwap. So a LP would be farming both tokens. Sorry if i am misunderstanding you!

Only LP tokens staked in the MasterChef contract get Sushi rewards, to get both, you need to create a Wrapper contract that gives out rewards on top of the Sushi ones.
I would like to suggest to modify your proposal in such a manner :slight_smile:

7 Likes

Hi Keno,

You’re absolutely right, maybe the proposal is lacking some information regarding the solution for this.
A wrapper contract is probably the best route for us to move forward on this, we will see what we can do and revise accordingly.

4 Likes

Maybe I’m not getting this right, but providing rewards for a COVER/ETH pool is Sushi paying a benefit to COVER/ETH LPs, which is good for the COVER project (at cost to Sushi)

Using the Cover protocol to insure Sushi contracts is ALSO a benefit to the Cover project, right?

I’m not against either of the ideas, but where’s the collaboration part?

Unfortunately I haven’t had time to do a deep dive into the Cover protocol, so I have no opinion yet about that. Are those contracts secure? Looks like the payouts are semi-manual? Voting through manually created snapshot polls? As I said, haven’t had enough time to look.

1 Like

I would also appreciate for you to provide full unit tests for your contracts. :slight_smile:
As a payout is solely decided upon by the “Claim Validity Committee”, its constitution needs to be explained and your strategies to prevent collusion.

It is good for the Sushi community as they can earn $COVER rewards as well in the ETH-COVER pool if they stake on our platform! They are also currently earning fees on our pool which we decided to officially set up with SushiSwap. Using Cover Protocol to cover the SushiSwap community benefits SushiSwap as well. It helps protect your community in an event of a loss due to a hack, bug, exploit or economic attack. If Sushiswap becomes a liquidity provider via Market Making or Coverage Providing, SushiSwap earns balancer trading fees and $COVER token. The benefits for SushiSwap were listed in the above proposal.

Our CVC is made up of auditors and security experts in the smart contract space and crypto space. Their reputation will be judged by claims processed and the outcomes. Will take into account our guidelines and will follow our guidelines. They will be posting their findings and research on our discourse as well. The CVC will take great consideration into the community vote. We are in the process of filing a Claim for Pickle.Finance. You should follow the process =).

Discourse :
https://gov.coverprotocol.com/t/cvc-statements-for-claim-filed-on-11-21-2020-for-pickle-finance/44

Claims Guidelines :
https://coverprotocol.com/Cover%20Protocol%20Claims%20Guide.pdf

Community Vote on Snapshot.Page
https://snapshot.page/#/cover/proposal/QmPSkV68ihhP8EAZbNoQVsTpUh82wiX18ckyEwiUbChRjQ

CVC Members so far (Adding more constantly) :
https://twitter.com/CoverProtocol/status/1324816572620460035?s=20

Audit :
https://github.com/CoverProtocol/cover-core-v1/blob/main/peckshield-audit-report-cover-v1.0.pdf

As I mentioned, I had not closely looked… I’ve since learned that you initially listed on SushiSwap (not somewhere else), which I’ll be glad to see rewarded :smiley:

Since the process of deciding claims is somewhat centralized and the protocol still quite new I’d suggest a modest allocation in the order of 250k SUSHI.

2 Likes

Update : We have paid our first claim for pickle.finance.

2 Likes