Should we give BootNode a grant to design an ERC-4626 compliant covered vault?

The BootNode team has requested a grant of 32,000 USDC to design an ERC-4626 compliant vault that takes an existing ERC-4626 compliant vault (e.g. Yearn) and purchases Nexus Mutual coverage on behalf of all users, with coverage effectively being paid from the yield. A bundled yield-bearing plus covered vault.

Project Description

To minimize technical implementation risks for this project, BootNode has proposed a step-by-step delivery approach including the following stages.

The current proposal will focus only on Phase 1 (Discovery & Planning). Development and testing of the complete solution will be a separate proposal, and its budget and duration will be determined at the end of phase 1.

Phase 1: Scope definition & project planning Phase 2: Iterative development Phase 3: User acceptance & transition

Motivation

1. Purchasing and managing coverage on an ongoing basis can be cumbersome due to the need to roll over and/or change coverage amounts.
2. Gas for cover purchases effectively means it’s not economically viable for smaller users.
3. Bundled products have much higher take-up rates due to the reduced user friction.

Deliverables

1. Product Definition Document covering business, functional and technical requirements.
2. Action plan: technology validation, recommendations on roadmap, milestones, scope, and effort estimates.
3. BootNode engagement proposal to create a synergetic incentive alignment mechanism (stables and tokens considerations. Goals and KPIs).
4. If required and time allows, we can also create a prototype.

Timeline The estimated timeline for this project would be 5 weeks of analysis, design, and prototyping. If this discovery phase is successful, it should be followed by a second phase for development (not included in this proposal).

The grant would be paid in two instalments:

• 16,000 USDC as soon as the proposal is approved
• 16,000 USDC once the deliverables are presented for review

Members can review the full text of the proposal on the forum: https://forum.nexusmutual.io/t/proposal-nexus-covered-vaults-discovery-phase/875/1