PoolDelegateCover
PoolDelegateCover
is responsible of holding custody of all first-loss capital posted by the Pool Delegate for a given Pool. First-loss capital exists to protect Liquidity Providers in the case of a Loan default. It is required to be posted by the Pool Delegate to ensure that they are directly financially incentivized to protect Liquidity Providers from losses.The Governor specifies the pre-requisite amount of first-loss capital that a Pool Delegate must provide in order to operate a Pool using
setMinCoverAmount
in MapleGlobals. This amount can be adjusted continuously over the Pool's operation.If pool cover falls below the required amount, two consequences occur:
- 1.The Pool Delegate can no longer fund new Loans.
- 2.The Pool Delegate can no longer earn management fees.
The Governor also specifies
minCoverLiquidationPercentage
in MapleGlobals. This value defines what proportion of the Pool Delegate Cover goes towards reducing losses during a default. During a default scenario, cover is liquidated up to this proportion.# Example 1
minCoverLiquidationPercentage: 20%
Cover posted = 1000
Default amount = 500
Cover liquidated = min(1000 * 20%, 500)
= 200
# Example 2
minCoverLiquidationPercentage: 70%
Cover posted = 1000
Default amount = 500
Cover liquidated = min(1000 * 70%, 500)
= 500
Last modified 4mo ago