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DePeg Cover

Introduction

Amulet DePeg Cover is a Vault powered peer-to-peer product which protects users from pegged asset volatility. Covers purchased by cover purchasers on Amulet are sold and underwritten by cover underwriters. In the event that an asset depegs and triggers a cover within the cover period, cover purchasers of the asset will be compensated with the cover underwriters’ capital.

Purchasing Mechanics

Cover purchasers may purchase cover by depositing their payments (i.e. contributions) into the ‘Purchase’ vault before the start of the cover period. SPL token receipts will be issued as proof of purchase. During the cover period, Amulet will check the price feeds listed below to determine if any asset has depegged and triggered the cover.

Underwriting Mechanics

Cover underwriters may underwrite covers by depositing their capital into the ‘Underwrite’ vault before the start of the cover period. Their capital can be withdrawn after cover expiry if the cover sold has not been triggered. SPL token receipts will be issued as proof of deposit.

Lock Mechanics

To ensure the stability of both price and underwriting capital for each cover, withdrawals are only enabled at settlement. In addition, deposits can only be made before the start of the cover period.

Settlement

Vault closure and settlement for each cover occurs when either the:
  • cover period has ended; or
  • cover is triggered according to its price feed.
If a cover is triggered during the cover period, the cover underwriters who sold the cover will be paid the contributions but immediately payout their capital pro-rata to the cover purchasers. The contribution-to-payout ratio of each cover is determined by their contribution and capital deposit amount.
If the cover is not triggered, the cover underwriters keep both their capital and pro-rated contributions at the end of the cover period. All deposit and withdrawal instructions can be found here.

Price Feeds

The following oracles and price feeds are used by Amulet to monitor the asset price for each cover:

Protocol Fee

A five (5) % protocol fee is charged on either:
  • contributions if the cover is not triggered; or
  • payouts if the cover is triggered.

User Guide

For a step-by-step guide on how to use Amulet's Vault services, check out the user guides here.