Levered Coverage

To ensure capital efficiency of our protocol, governance will be able to determine the target leverage ratio of each vault (Amount insured/UST deposited for insurance). When a vault is overleveraged, the emissions of $SHARD tokens to insurers increase while the emissions to insurees decrease, and vice versa when a vault is underleveraged, incentivizing an equilibrium decided by market sentiment on the target leverage ratio. Insurance premiums will also dynamically shift to incentivize the maintenance of the leverage ratio.

Good to know: Splitting your product into fundamental concepts, objects, or areas can be a great way to let readers deep dive into the concepts that matter most to them.

Last updated