Weekend Cover
Weekend Cover protects a basket you hold against a drop over the weekend. How it pays out, how the move is measured, buying cover and underwriting it.
Weekend Cover
The tokens in a basket trade all weekend; the stock markets under them don’t, so a basket can open Monday well below Friday’s close. Weekend Cover is protection against that gap, bought from other people: a buyer pays a premium for cover, an underwriter locks the money that pays it, and the CoverMarket contract holds both sides, records the prices and pays whoever is owed. It sets no prices and takes no side.
How cover pays
Cover protects an amount of a basket over a range of the drop, and pays the loss inside that range in proportion. Protect $10,000 of MAG6 from −3% to −10%:
| Monday, against Friday’s close | The buyer is paid |
|---|---|
| Above −3%, or up | $0 |
| −6% | $300 (the 3% inside the range) |
| −10% or lower | $700 (the whole range, the most it pays) |
The app offers ranges in plain words, such as Small dips too (−2% to −7%), Standard (−3% to −10%) and Big crashes only (−5% to −15%). Any range on the contract’s grid can be listed: half-percent steps, starting at −0.5% or lower, at least 1% wide, ending no lower than −30%. The smallest cover is $10.
The week
- Trading: until 10 minutes before the last US close of the week (Friday 4:00 PM ET; 1:00 PM on an early close, Thursday when Friday is a holiday). Cover can be bought up to three weekends ahead.
- Close: each constituent’s Friday price is recorded at the close.
- Locked: over the weekend nothing trades, so nobody can buy cover on news that’s already out. Listings nobody took can still be withdrawn.
- Settle: 30 minutes after the next open (Monday 10:00 AM ET; Tuesday after a Monday holiday), so the opening auction is done and the pools have caught up. The Monday prices are recorded, and every cover on the basket pays its share.
How the move is measured
The move is the basket’s constituents at its target weights, each one’s Monday price against its Friday price. Every price is that token’s own Uniswap pool, a time-weighted median over the 10 minutes before the moment, read by the price router (see How NAV works); no external feed is used. The drop is counted in whole basis points, rounded in the underwriter’s favour by less than 0.01%. Nothing reads the vault’s balances, so tokens sent to a vault can’t move an outcome.
Each price must be recorded within 15 minutes of its moment; anyone may record it and the keeper does so on the minute. A price is never taken late: a missed window, or a constituent the router can’t price, makes that basket’s weekend void, and everyone gets back exactly what they put in, fee included.
Buying cover
- Holders only. Your cover on a basket for a weekend can’t exceed what your units are worth, checked when you buy. You can sell the basket afterwards and still be paid.
- From your bskts account. Turn cover on once (one signature); after that it signs with your session key like a trade, and the gas is paid for you. A session may pay at most 3% of the cover in premium and fee, and cover counts against its daily limit separately from trades.
- Payouts arrive by themselves. The keeper claims for every account as soon as a weekend settles; if it hasn’t within half an hour, My cover shows Claim now, with nothing to sign.
Underwriting
An underwriter offers cover at their own price and locks only what it could pay: the range’s width times the cover, $700 for $10,000 of −3% to −10%. When the weekend settles they get back what the drop didn’t take, plus the premium. An offer can repeat every weekend, rolling the same capital into the next week. What your session key may lock a day is your underwriting allowance, 0 until you set it; an offer over it, or one that repeats, takes one owner signature.
What nobody can change
The contract holds the money and pays by fixed rules. Nobody, bskts included, can move escrowed money, change a recorded price or an outcome, or change the terms of cover already sold. bskts can change the fee, the range grid, the minimum and the timings, but only for new trades and for weeks published afterwards, and can void a weekend (everyone refunded) only at least 24 hours before its close, before its outcome can be known. The contract has no proxy: its code can’t be replaced.
The prices come from the constituents’ pools, so a large, sustained push on a thin pool around a close or a settle is the main residual risk; it would cost far more than any cover sold today.