Verdict Cover

Overview

DeFi cover today usually means a discretionary mutual: a committee or token vote decides your claim after the fact, payout timing is unpredictable, and the premium was never priced by anything you can audit. The deeper problem sits upstream. Cover without an independent risk primitive is guesswork with a treasury attached.

Every allocator's DD pack has the same two unticked boxes: who rates the underlying, and who covers the loss. Verdict Cover closes the second box with the first. A protocol is rated against a published methodology; the rating seeds a live market that prices protection continuously; and if a covered event occurs, the claim path is defined in code rather than a forum thread.

Verdict is never the counterparty and never decides claims. Detection and dispute run on infrastructure outside Verdict's discretionary path. And because a pool priced off the grade re-prices every block, the market grades the rating back in basis points, continuously.

How it works

01, Rate. The underlying protocol is scored against Verdict's published methodology. The grade is public before the market opens.

02, Price. The grade seeds the market's opening weights: a stronger grade opens with cheaper protection. From the first block the AMM takes over, and the premium is whatever the market says it is, updated continuously. The seed is the opening quote, not the price.

03, Cover. A dollar of USDC collateral mints two ERC-20 positions: CLAIM and NOCLAIM. Seekers hold CLAIM for protection. Providers hold NOCLAIM for the premium. A parametric trigger, not a committee, determines resolution.

See the whole machine animated on the product page.

The market

Every coverage market splits a dollar of collateral into a CLAIM token and a NOCLAIM token. Seekers buy CLAIM. Providers keep NOCLAIM as yield. At expiry one side redeems for par and the other is worthless: resolution divides the dollar.

Under the mechanics this is a prediction market on one question: does this protocol get hacked inside the cover window? CLAIM is yes, NOCLAIM is no, and the price between them is the market's live odds of a hack.

Both positions are plain ERC-20s with a market price every block of their life. You can exit before expiry, sell cover you no longer need, or take the other side at any time.

• AAA: heavily NOCLAIM-weighted opening seed.
• A: strongly NOCLAIM-weighted opening seed.
• BB: moderately NOCLAIM-weighted opening seed.
• D: balanced opening seed.

Seeds are starting weights only; the market discovers the real premium after open. Numeric example seeds are shown on the product page, and per-pool schedules and any wallet caps are published at listing.

Underwriting

The Coverage Provider role is permissionless, and it is open to the rated protocol itself. A treasury confident in its own security posture can underwrite its own pool and turn that posture into a revenue line.

• Day-one premium, received when the protection side is sold at the market's opening price.
• Trading fees, earned on secondary volume as positions change hands through the window.
• Principal at clean expiry: the full collateral returns if no covered event occurs.

The downside is bounded and known in advance. A covered event pays claims from the collateral at the settled ratio, and exposure never exceeds the deposit. A worked numeric example sits on the product page; the structure holds at any scale.

Claims and settlement

Detect. Multiple independent monitoring feeds flow into the Chainlink Runtime Environment. When the severity gate trips, CLAIM issuance auto-pauses on-chain. Positions freeze rather than re-price while the claim is pending.

Assert. The claim goes to UMA's Optimistic Oracle as a public, bonded assertion with a 48-hour dispute window and economic bonds on both sides. Honest claims settle automatically; a false assertion pays the challenger from the filer's bond.

Backstop. A seven-day governance window covers the genuinely anomalous edge cases, and it works in one direction only: it can halt in public, on-chain. It cannot create a payout, reverse one, or rewrite terms. A brake, never an engine.

Pay. CLAIM redeems at the settled ratio and NOCLAIM redeems for the remainder. Every step is observable on-chain, and no step is discretionary.

Fees

The fee structure is direction-neutral by construction: Verdict earns the same whether a claim fires or not, which removes any economic interest in claim outcomes. Fees apply in three places: on redemption flows, as a share of AMM trading fees, and as a one-time pool-creation charge. The current schedule lives on the pricing page.

Access and networks

Pools live on their home chain. Chainlink CCIP and the Cross-Chain Token standard carry premiums and payouts across chains, with Ethereum, Arbitrum, Base, Optimism, and Polygon supported at launch.

Access comes in two tiers. The retail tier is permissionless with no KYC. An institutional tier with ACE-based compliance gating sits alongside it for regulated capital.

FAQ

What exactly triggers a claim? Parametric conditions published per pool before listing. Detection requires corroboration across independent feeds, and the trigger is evaluated in code: the event is the claim.

Can the team decide not to pay? No. The claim path is defined in code, Verdict never decides claims, and the governance backstop can only halt: it cannot create, reverse, or rewrite a payout.

What happens to my position if trading halts? Positions freeze rather than re-price while the claim path runs, and redemption happens at the settled ratio when it completes.

Can I exit before expiry? Yes. Both positions are plain ERC-20s with a live market price; you can sell either side any block of the window.

Is a partial payout possible? Yes. The settled ratio divides the collateral: CLAIM redeems at the ratio and NOCLAIM redeems for the remainder.

Who holds the collateral? The pool contract on-chain, fully collateralized one to one. There is no shared fund to drain and no custodian in the path.