A new proposal from Cover Protocol is now live on SushiSwap Forum. The proposer suggests a synergistic relationship between the two platforms. The final goal is to improve the security of smart contract-based platforms. The proposal is live right now, and SushiSwap community members are voting for/against it.
Proposing a Strategic Partnership Between DeFi Protocols
Cover Protocol made a significant move by suggesting a partnership in another protocol’s forum. They believe these collaborations will help the industry as a whole and may substantially improve the underlying technologies.
“An incentivized COVER-ETH SushiSwap pool. SushiSwap uses an allocation of its treasury to help provide exploit protection to its community. Coverage would be provided in the event of a hack, bug, exploit, or economic manipulation attack.”
Coverage is the primary goal of the new proposal from Cover Protocol. They focus on protecting and covering the DeFi community by providing coverage for smart contracts. Their latest proposal wants to expand the coverage to the SushiSwap community.
Each coverage needs funding or liquidity pool. Cover Protocol suggests that SushiSwap allocate a portion of funds for the new coverage system. It will help DeFi developers have ease of mind about the security of their products. According to the proposal, one part of the final goal is:
“Allow for the treasury to allocate a portion of its funds towards being a market maker and/or coverage provider by minting CLAIM and NOCLAIM tokens and providing liquidity with those tokens. In order to make the price of coverage on SushiSwap as affordable as possible, we recommend that SushiSwap become a coverage provider or market maker.”
Coverage provider and/or market maker are the suggestions of Cover Protocol for SushiSwap in the coming platform. They believe each choice has benefits for SushiSwap.
If the community decides to provide a coverage provider, they benefit from earning premiums by selling the CLAIM tokens. Another significant benefit is the option to earn $COVER tokens by staking NOCLAIM LP BPT tokens.
Market making has some benefits for the SushiSwap community, too. They can earn $COVER tokens by staking CLAIM and NOCLAIM LP BPT tokens. Besides, providing liquidity for the coverage pool results in earning balancer fees for the members. Additional benefit details are posted on the proposal topic.
Regardless of the proposal result, it shows the incentive to work and collaborate between DeFi protocols. It means they are trying hard to use their assets and talents to improve the industry.
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