How to buy cover for my vault deposits

[okaneis]

I deposited in DAI v1 vault months ago and recently to USDC v2 vault also , sums of significant value for my budget.

Now , after the recent exploit which resulted in a loss ( a loss that eventually compensated later by the fast and effective team’s actions) , i seriously thought about how i can get cover for my investments on yearn .

Now , i must admit that eventhough i try to learn as much as i can and i have been interacting with defi protocols the last few months i am by no means a tech savvy guy !

so I tried to get a quote on nexusmutual ,it states that the yearly cost is 2.6% (which seems fine if you take into account that interest on DAI or USDC vaults is currently 17-20% ) however i can’t buy that because “Requires more staking!”

I will not pretend that i know what that means ! I don’t!

And i would be gratefull if someone can eli5 here!

If that was my experience on nexus then can easily will be everyone’s guess what was my experience on coverprotocol!

Man! i was lost from the start there!

Isn’t there an easy way to do this?

Can i just give my eth public address where my yDAI or yUSDC rests , then pay some % for covering this investments and get done with this?

Or even better couldn’t be an option to get into a pre-covered vault (insured) for a reduced APY when compared with an un-covered one?

I believe that even if a pre-covered vault was the only option would be better and more adopted , since average joe’s would be sleeping much easier even with less APY’s on their funds if they were covered from possible losses!

I would very much appreciate any thoughts and if there is a simple step by step guide to purchase cover for my yearn vault deposits

Thanks

[Dark]

Hello. Sorry, it has been such a headache finding cover for your assets, hopefully, we can simplify this in the future.

There are two main insurance providers currently in the crypto space. We have Nexus Mutual and Cover Protocol. Cover Protocol is probably the easiest to get and use as you can just buy it with dai whereas with Nexus you have to become ‘a member’, which just means you need to KYC, not hard but some people don’t like that.

Currently, Yearn coverage on Cover has yet to have its pool redeployed after the hack, but the Cover team says it should be up by the end of the month. When it is live it is as simple as going to Cover: Yearn and buy the claim tokens.

Cover uses a system of CLAIM / NO CLAIM tokens in a balancer pool. So if you want coverage in the case of a hack/exploit on Yearn’s smart contracts (such as the one we recently suffered on yDAI v1 vault) you would buy CLAIM tokens for Yearn. It will tell you on their page what the yearly cost of the insurance is currently at, so you can decided if it is worth it for what APY you are making on the vaults. It will also tell you the timeframe for that coverage. On the other side of this if you feel that the protocol you looking at getting coverage for will not be hacked you could buy NO CLAIM tokens and take the other side of the trade. These tokens last for a few months they have an option to choose your length of time and at the end of that time period if there isn’t a hack you can take your NO CLAIM tokens and redeem them for 1$ and if there is a hack you can redeem you CLAIM tokens for 1$ each.

Looking a Nexus Mutual yearn coverage they are also out and waiting for more people to stake against yearn’s contract so you would have to check back at their site here search for Yearn and it will tell you if they have some coverage available. When the site says requires more staking this just means that their cover is sold out currently and waiting for more to come available (Yearn coverage is in high demand currently). You do NOT need to stake to get coverage with Nexus, you just need to kyc and I think they take eth or dai if they have coverage available. They will also tell you the rates for coverage on the page above (when they have some free).

Another thing to consider when buying insurance from both Nexus Mutual and Cover Protocol is that our Vaults interact with more than one protocol at a time. So If you wanted full coverage on the yDAI v1 vault you would need to get yearn coverage and curve coverage. The yearn coverage would pay out in the case of a smart contract failure on yearn side and the curve coverage would pay out in the case that the ydai vault’s funds in curve were somehow exploited. If you are unsure which Vaults interact with which protocols feel free to ask in our chats at discord or telegram and we would be glad to answer.

We are looking at the idea of pre-covered vaults but don’t have anything to release at this time, but definitely something we have been considering!

[okaneis]

Thank you so much for your response! You are answer clarifies many issues and i am sure will be usefull to others as it was for me!
Eventhough as i already said i am interacting with defi space for a few months , i have whitnessed or learned about more than a few exploits and hacks and and imho this is one of the major challenges defi is facing .
I am sure there would be huge demand for cover in the future and people would need reliable , clear and hopefully simple info about how to use these services.
Now , maybe i am mistaken here and i missed sth , but your answer above was the closest i found to a much needed info/guide and i searched for a while!
I believe that coverprotocol for example needs to do some work in this field in informing / educating people the simple way!
Imo There’s a lack of such info in their site!
I am happy to hear yearn is considering the idea of pre-covered vaults , again imho this should be a priority!
Thanks again!

[Dark]

No problem, glad I could help. If you ever have any questions feel free to join our telegram or discord and ask.

[Beepidibop]

Does anyone think we can have another back scratcher made for NXM? It’ll be a pretty good moat for yearn like the CRV back scratcher.

There is the problem that NXM tokenomics is completely different from CRV. But if we can figure out a way to get this to work, we can solve the lack of insurance problem.

Maybe we can have a NXM backscratcher that takes a portion of the profit from every other vault to fund it.

[Dark]

Would this be like what https://armor.fi/ is doing with their arNXM vault? I’m not sure it could work exactly like the veCRV vault does though.