Cover Types

You may have seen the phrase guaranteed payout in our documentation, website, blog, videos, and other materials.

It is critical that you grasp the distinctions between "dedicated" and "diversified" cover pools. Due to its complexity, we first planned to build "diversified pool" as the primary feature of version 2. However, we rolled up our sleeves and completed the "v2" feature in its entirety as part of the "v1" release.

Please keep in mind that the guaranteed payout only applies to dedicated cover pools. In order to cover a single dApp, a dedicated cover pool is created as a standalone product. It has no capital efficiency, leverage, or support for child products. Diversified cover pools, as opposed to specialized cover pools, may support and collectively cover a variety of "products" with extra leverage and capital efficiency.

Below are some important distinctions and similarities between "dedicated" and "diversified" cover pools:




Protection Model Parametric Parametric
Triggered By Incident Reporting Incident Reporting
Product Model Standalone Multiple products
Child Covers Not supported Supported
Leverage Factor No Yes
Capital Efficiency No Yes
Premium Cost Higher Lower
Payout Model Full payout First come first serve, up to the maximum balance available in the pool
Payout Guarantee* Yes No
Policy Purchase From Cover pool Product pool
Liquidity Allocation Single pool Multiple products
Resolution Achieved Via Staking Staking
Personally Identifiable Info Not collected Not collected
Proof of Loss Not required Not required

* the guaranteed payment is predicated on the Neptune Mutual protocol not being hacked.