RAI Coverage is Available from Cover Protocol

We’re excited to announce that RAI holders can now buy smart contract coverage to cover any losses that might result from vulnerabilities in the RAI contracts! In order to bootstrap the coverage for RAI, we will be offering 20,000 yDAI in rewards for people who provide coverage.

RAI Coverage Seekers

Coverage Seekers can now buy cover for a fixed period of time by going to the Cover Protocol Marketplace and choosing RAI.

Here are a couple of details about the cover:

• Expiration Date: this initial cover is valid until 4/30/2021
• The cover pays out in DAI (collateral)
• The CLAIM token for RAI can be traded in this Balancer pool
• The NOCLAIM token for RAI can be traded in this Balancer pool

Cover Dashboard for RAI

Should a claimable incident occur, you will need to file a claim for RAI. If the claim is approved, you can redeem your CLAIM tokens for 1 DAI each. Keep in mind that an incident needs to be reported within 3 days in order for it to be eligible.

Liquidity Providers

Anyone who wants to make a financial bet on the security of the RAI contracts can earn fees by providing coverage.

You can mint CLAIM and NOCLAIM tokens for RAI from the Cover app. You will need to select the Expiration Date you wish to use (currently 4/30/2021) and input the amount of collateral you wish to provide.

Here’s how the CLAIM & NOCLAIM tokens work:

• CLAIM tokens are worth 1 DAI if an incident occurs
• NOCLAIM tokens are worth 1 DAI if the expiry date is reached without an incident
• CLAIM+NOCLAIM can be redeemed together before incident or expiry is reached for 1 DAI

As a Liquidity Provider you have the following options:

• If you believe RAI won’t have any claimable incidents, keep your NOCLAIM tokens until after expiry, sell your CLAIM tokens into the Balancer pool for DAI profits.
• If you believe RAI will have a claimable incident, keep your CLAIM tokens until the incident, then sell your NOCLAIM tokens into the Balancer pool for DAI profits.
• If you simply want to earn fees from Coverage Seekers, add your CLAIM + DAI to the Balancer pool as a liquidity provider, you will earn trading fees (cover purchases) every time a Coverage Seeker buys CLAIM tokens.
• If you want to earn fees from Coverage Seekers and prediction market users, add both your CLAIM + DAI and NOCLAIM + DAI to the Balancer pool as a liquidity provider, you will earn trading/coverage fees.

Shield Mining Rewards

To incentivize liquidity providers to provide coverage, Reflexer is allocating 20,000 yDAI tokens for shield mining. The yDAI rewards will be distributed evenly from now to expiration (4/30/2021) to coverage providers. The yDAI rewards distribution is scheduled to start around 2pm CST on 02/18/2021.

These incentives encourage users to provide coverage for RAI and allow RAI holders to buy coverage with minimal slippage on Balancer.

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