Concepts
Pools and premiums
One pool per wrapper and week, fully collateralized, priced on a utilization curve.
One pool per wrapper and week
Weeks run from Monday 00:00 UTC to the next Monday 00:00 UTC. Each wrapper gets a new pool for every week.
- UnderwritingDeposits open. Cover can be bought.
- CoveringObservations count. Cover sales stop T before the end, and pause while a streak is open.
- SettlingThe window has ended; for 30s a last observation may still land.
- ExpiredNo trigger. Buyers close positions; underwriters withdraw capital plus premiums.
Deposits close when the coverage window starts. From then on the set of underwriters is fixed, and every premium paid into the pool is shared among them by deposit.
Capacity
Pools are fully collateralized. A pool can sell cover only while
With a 20% cap, 10,000 USDC of deposits backs 50,000 USDC of cover. Whatever happens, the vault holds enough to pay every claim in full.
Utilization and the premium rate
Utilization is the share of the pool’s capacity already sold:
The premium rate for a week rises with utilization along a kinked curve:
| Production parameter | Value |
|---|---|
| base | 0.02% a week |
| slope1 | 0.08% |
| slope2 | 1% |
| kink | 80% |
What a purchase costs
A purchase moves utilization from u₀ to u₁. Its premium is the area under the curve between the two, scaled to the pool:
Because it integrates over the utilization the purchase moves through, one large purchase costs the same as the same notional bought in pieces. A purchase made later in the week pays only for the time left. The premium is paid up front, in USDC, when the cover is bought. On the pool page, the shaded area under the curve is exactly this integral for the notional you type.
The issuer credit curve
Each pool publishes its curve, and its pool page marks where the pool sits on it. Across issuers, the pools show how much cover the market wants against each one, and at what price.