Cover Creators#

Cover creators are project teams or community leaders who wish to create protection for their products and services. For a cover contract to become effective and successful, a cover creator must properly compose the rules or parameters of the coverage, exclusion, event triggers, etc. Confusing or unclear terms and definitions will discourage underwriters and liquidity providers from pooling the risks that defeat the whole purpose of crowdfunding and minimizing your project risks.

Since the Neptune Mutual protocol is an open market, you need to regard your cover pool as your product or service. Your cover needs a long-term plan and strategy to ensure that your project is sufficiently covered from exploits and attacks. The following are a few best practices when it comes to making your cover attractive to the community:

• Before you launch your cover contract on Neptune Mutual, create a proposal to list your project's token to be distributed on the Neptune Mutual Staking portal. This improves your project's visibility with the Neptune Mutual community. A user who has your tokens may also have a vested interest in your project's growth and success.
• Clear and concise rules about how and when a cover incident occurs. Remember that you need to find a balance between the risk poolers and policyholders. The cover parameters should be as less risky as possible for the liquidity providers. On the other hand, the parameters should also be equally transparent on the conditions under which the policyholders are getting a payout.
• Have a long-term mindset about your cover pool. Do not assume that creating a cover on Neptune Mutual will automatically get your project covered. You have to work with the community to promote your cover pool.
  If you are a new project, create an allocation called protection fund in your token design. Alternatively, you could also reserve a portion of your regular project earnings for risk pooling your cover.
• To attract more liquidity providers, offer a reassurance fund from your side. During trigger events, a portion of the reassurance fund gets transferred to the liquidity pool. The reassurance fund helps minimize the liquidity provider loss who collectively pooled the risk. Once you provide a reassurance, you can not ask to receive it back.
• When the community supplies liquidity to your cover pool, they receive a special kind of ERC-20 token called PODs. Since Neptune Mutual has dedicated cover pools and PODs, you should consider rewarding your POD holders by providing your project's token as a reward when they stake their PODs in the Neptune Mutual UI or your application.

Jacket#

A jacket is a document accessible when you access a cover using the platform UI. This is a downloadable file that contains the terms, conditions, exclusions, insured events, triggers, etc of the selected cover.

Exclusions#

The exclusions are the cases in which the liquidity pool does not provide any coverage or risk protection to the policyholders. You must carefully read and understand the exclusions before you propose to buy any coverage.

Parameters, Coverage Perils, or Clauses#

This refers to the "parameters", rules, terms, and/or conditions of the covers. For successful claims payout, all clauses must resolve as "true". To avoid losing the NPM stake, the governance participants must properly assess the clauses before submitting an incident report, dispute, or cast a vote.

Trigger#

In parametric insurance, the trigger is the moment when the parameters are fully met. This is also known as the cover incident. There is a 7-day reporting period (waiting period) before you can file a claim. A claimant must request a payout by redeeming the cxTokens during the next 7-day claim period.

Anyone who has NPM tokens can "notify" the protocol about this incident by submitting a report. The first person, protocol, or bot that reports an incident is called "first reporter". The first reporter will be eligible to receive a 20% commission on the protocol fees. If the first reporter was found to be lying, the reporter who first disputed the reporting (candidate reporter) will get this reward instead.

Other NPM token holders can also participate in the decision-making process by carefully assessing the jacket and then contributing their stakes on either side during the reporting period.

Coverage#

Coverage refers to the available protection a proposer gets when purchasing a contract or policy. In Neptune Mutual, coverage or cover refers to individual protections. Similarly, covers can also be grouped together based on their properties or functionality, known as a product. For example, exchange products can contain a list of covers that protect digital asset exchanges from losses arising from exploits and attacks.