Launch of Credit Default Swaps

Cover Protocol
2 min readMar 5, 2021

Cover Protocol is pleased to announce the official launch of Credit Default Swaps (CDS), the first of its kind in the DeFi space! For the first venture into CDS, we will be partnering with Ruler Protocol.

You can read more about CDS on Cover from our previous article.

Lenders on Ruler Protocol now have the option of hedging the default risk from the borrower side. As a result, insolvency risk will be minimized even in the absence of liquidations. In order to attract liquidity to the pools offering this coverage, Ruler will incentivize these Cover pools using RULER tokens. We will also list Ruler Protocol for platform coverage options as well.

An allocation of ~20,000 $RULER tokens will be spread across Ruler Pairs in the next 3 months. The first batch consists of 3 CDS pools and a Ruler Protocol coverage pool. Please see the below chart for a breakdown of information.

Farming/Rewards Mining as a New Farmer

If you are new to Cover, be sure to read our documentation before anything. To farm the new pools:

  • Mint coverage on the above CDS options and or protocol. Make sure expiry lines up with your choice (please select the correct params).
  • Add NOCLAIM token liquidity into the [50% NOCLAIM / 50% DAI] Balancer pool for the corresponding CDS and or protocol with the correct expiration.
  • You can choose to sell (as a coverage provider) or hold (as a market maker) CLAIM tokens. Read more here about the impact of your options.
  • Deposit the LP Token into the pool under the Rewards Mining tab.

Thanks for your continuous support.