In order to bootstrap underwriting capacity for certain products and generate higher returns for underwriters, Amulet's Cover Acceleration Program (CAP) will engage with covered protocols' teams to accelerate cover adoption.
For example, when smart contract cover is launched for Protocol A, its initial price may be high due to limited capacity as underwriters may not have as strong an incentive to back the risk versus older cover products. Protocol A can incentivize underwriters with its native tokens or other rewards and additionally $AMT rewards jointly sponsored with Amulet. This helps to increase Amulet's cover capacity and reduce costs for cover purchaser while underwriters earn more rewards. Additionally, pool rewards allocated by Protocol A may serve as an additional buffer against claim payouts.
The CAP will initially apply to Smart Contract Cover before expanding to other cover products on Amulet. As Amulet sees it, everyone stands to benefit from the CAP. Users have access to more options for risk protection, protocols are able to attract more users, underwriters safely earn rewards on their principal, and Amulet is able to extend and expand its product offerings to more users.