Rating-priced parametric cover: the rating prices the premium.
Parametric cover whose premium is seeded from the rating, with the claim path defined in code rather than a forum thread.
The gap
DeFi cover today 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. And 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. Cover closes the second box with the first.
Coverage
Funds drained
An exploit removes assets from the protocol.
Keys compromised
Privileged control is taken by an unauthorized party.
Unauthorized upgrade
Contract logic is replaced outside the governed process.
Emergency pause
The protocol halts itself in response to an incident.
Per-pool claim conditions are published before every listing. Full coverage scope
How it works
One dollar in. Two positions out. The market prices the odds. Code settles the claim. How it works, in full
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 redeems for par; the other is worthless.
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.
Example seeds
Rating to premium table
Premium
~1%
Seed
98 / 2
Cap
Uncapped
Premium
~4%
Seed
92 / 8
Cap
$1M / wallet
Premium
~12%
Seed
80 / 20
Cap
$100K / wallet
Premium
~50%
Seed
50 / 50
Cap
$10K / wallet
Seeds are starting weights. The AMM discovers the real premium after the market opens.
Underwrite
The Coverage Provider role is open to the rated protocol itself. A treasury confident in its own security posture can underwrite its own pool.
When a Coverage Provider deploys collateral into a pool, the rating determines the day-one premium split and the trading curve seeds the AMM. The pool returns three cash flows over the year.
Worked example
Arbitrum / Aave v3 · AAA · $500k collateral
Day-one premium
$25k
Priced by the rating-seeded AMM
AMM swap fees
$25k
On $5M of secondary trading volume
Principal returned
$500k
At clean expiry
Total Year 1
~$50k
10% gross yield on AAA-rated pool
The downside is bounded and known in advance. Numbers are illustrative; the structure holds at any scale.
When an exploit hits
01
Multiple independent feeds flow into the Chainlink Runtime Environment; when the severity gate trips, CLAIM issuance auto-pauses on-chain.
02
The assertion goes to UMA's Optimistic Oracle: a 48-hour dispute window backed by economic bonds on both sides, settling automatically if undisputed.
03
A seven-day governance backstop covers the genuinely anomalous edge cases.
04
The payout fires and CLAIM redeems.
No forum thread decides your claim, and no step is discretionary.
Trust architecture
Verdict's fee is the same whether a hack fires or not: 0.10% on redemption, a 0.50% AMM share, and a $2,500 one-time pool-creation fee, all direction-neutral. Verdict is never the counterparty and never decides claims; detection and dispute run on infrastructure outside Verdict's discretionary path.
And the loop cuts both ways: a pool priced off the grade re-prices every block, so the market grades the rating back in basis points, continuously.
Where it runs
Pools live on their home chain; CCIP and the Cross-Chain Token standard carry premiums and payouts across chains, with Ethereum, Arbitrum, Base, Optimism, and Polygon at launch. The retail tier is permissionless, no KYC. An institutional tier with ACE-based compliance sits alongside it.
Who it's for
Protocols
Turn security posture into a revenue line by underwriting your own pool.
Allocators
Cover on the same exposure the rating already scores.
Underwriters and yield desks
Risk you can price, trade, and exit any block.
Position holders
No forum vote ever decides your claim.
Join the waitlist
Pools open September.
Drop your email, we'll let you know the moment the first markets list.