159% APR, without impermernant loss! Newly launched $COVER mining program
Updated on Nov. 12, 2021.
Please note that this program has been stopped and will not resume again.
Why mining $COVER?
Liquidity minging programs in AMM generaly enjoy impermanent loss. But when mining $COVER, you sleep well without worrying about it. But why?
$COVER mining is based on order books rather than AMM. When you put an sell order, you are mining $COVER, without any on chain transactions. What does that mean? It means if you put your sell order with a high selling price, no one will fill your order and you are mining! You funds stay safely in your OWN wallet!
Why is this important?
This means the token of the selling order is still in your wallet, safely, while you earn high APR, without risks! Sellers are selling for a very high price and enjoying 159% APR $COVER rewards now! And all their tokens are safely in their very own wallets.
That sounds great, but is that true?
Definitely yes! Lets check out a few facts.
Firstly, let’s make clear how this program works
- You Deposit 10k DAI and get 70k CLAIM tokens. (7 different tokens, 10k each)
- You put each of the 7 tokens in sell orders on https://coverrules.com
- You are mining, shareing 35 $COVER per week with other miners!
Secondsly, let’s check the selling price of the CLAIM tokens
CLAIM tokens are selling for 0.23 DAI each. And that means coverage seekers will pay 0.23 DAI for 3 months and 92% premium yearly.
And obviously no one will buy coverage for such high premium.
If someboy actually did, you earn high premium. You can sleep well without worrying about impermernant losses.
Is the APR really that high?
Currently 270405 DAI deposited for the mining program.
And rewards per week is 5 COVER/pair * 7 pairs=35 COVER.
Current $COVER price is $236.
So you get 35*236/270405=3.05% weekly rewards.
So APR is 3.05%*52=159%
How long will the program last
So 14490/(35 per week*52 weeks per year0=8 years.
If team extend the mining program to 8x more pairs, it will last for 1 year.
No minting/redemption fees as of now. So you just pay gas for minting/aprroving tokens/placing orders/redemption. You redeem three months later. The gas paid should be fairly low where compared with the high reward.
Lowest premium on insurance platforms is 2.6%. So if you want you order to be filled and earn premium, it is realistic to sell for 2.6% each and earn 2.6%*7=18.2% premium for the seven CLAIM tokens. The 7 CLAIM tokens provide coverage for 7 bluechip protocols and should be relatively safe from exploiets.
How to mine $COVER
- Make sure you have DAI in your wallet for mining.
- Go to app.coverprotocol.com and choose BluePool.
- Click Mint/Unwrap to mint. (You will be asked how much DAI to be staked. If you chose 10k, then 10k of each of the 7 CLAIM tokens will be in your wallet after the tx. The 7 CLAIM tokens provides coverage for 7 Bluechip protocols as shown below)
- Go to coverrules.com to put sell orders of all the CLAIM tokens.(Approve and sell order for each of the 7 CLAIM tokens. )
The previously calculated 159% APR is average APR for all miners.
Lower order price gets you higher APR, which means your rewards will be higher than the previuosly calculated 159% APR. The lower the selling price, the hight the APR.
The above analysis is based on noone buys your sell orders. You get 159% APR ,from mining rewards.
But what if someone buys all your sell orders?
The answer is you get high premium.
If someone really wants to pay 92% premium for each of the 7 Bluechip protocols covered. And you will enjoy 92%*7=644% APR for the premium. And if one of the protocols got exploited, and all funds lost (that is not likely to happen according to many exploits in the past year), you lose 100%. And that is still very juicy to enjoy (644%-100%)=544% APR.
The $COVER mining program is different from general minging programs that has impermernant loss. And miners will get high APR (159%-544%)no matter their sell orders are filled or not. It is a very good ming program that I expect to last for 1 year.