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Welcome About Neptune Mutual Capital Pooling Risks NPM Token Vote Escrow NPM Token Gauge Controller Registry Liquidity Gauge Pools Neptune Mutual NFTs Project & Repositories Neptune Mutual FAQ AMA Recap 2022
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  3. About PODs

About PODs
How Proof of Deposits (PODs) works?

When you supply stablecoin to a cover liquidity pool (also known as vault), a special token called Proof of Deposits (PODs) is issued by the protocol. The PODs represent your proportional share of the vault. Note that each cover has a dedicated liquidity pool and unique POD. The PODs across liquidity pools are different smart contracts and thus non-interchangeable.

Since the policy fees get automatically compounded to the liquidity pool, new liquidity contributions could result in less units of PODs being minted. For example, check the following transactions:

Transaction #1

Add Liquidity (500,000 DAI)

https://mumbai.polygonscan.com/tx/0x46b173606709254ed30fd4dae6ca18f090a5635eb6e8f5431113ff38a93cbf02

Parameters:

  • Added 500,000 DAI
  • Received 500,000 PODs

Transaction #2

Policy Purchase (1223 DAI)

https://mumbai.polygonscan.com/tx/0x8c7639867ab27db76ff9424180f48af18779b31c1dc0a028c0d188b46edf3b0d

Parameters:

  • Purchased policy of 50,000 DAI by paying 1223.20 DAI. This fee is an income of the cover vault.
  • Received 50,000 cUSD (USD Cover Token)

Transaction 3

Add Liquidity (Again 500,000 DAI)

https://mumbai.polygonscan.com/tx/0x317862bec3e6c56110df0e3c2c9a1665b3443c2bdeabd79122e1f7a661a96d20

Parameters:

  • Added 500,000 DAI
  • Received 498,980.99 PODs

The contribution of 1223 DAI to the cover vault increases the pool liquidity. Because of the increased liquidity, the third transaction therefore emits proportionally equal but less units of PODs.

Redemption#

You will need to redeem the PODs with the vault contract to receive your proportional share of liquidity. The vault then burns the PODs sending back your liquidity. Ensure that you do not lose access because there is no way you can get your liquidity back without redeeming the PODs.

POD Staking Rewards#

For Liquidity Providers

On top of the policy fee income, NPM rewards, flash loan interest, and other incomes received on the pool, you can also stake your PODs in the Neptune Mutual Pool to earn additional ROI in the form of the cover project's tokens.

The incomes generated by staking the PODs is called Shield Mining Rewards.

For Cover Creators

As a cover creator, you may want to attract and incentivize liquidity providers by offering your project's native token as a staking reward.