OTC 125 COVER to Yearn

Background Cover Protocol is having the V2 smart contract(s) audited by Quantstamp along with other external and internal reviews/audits. Smart contract audits are a crucial part of our security practice which we have mentioned in our Medium post about moving forward.

TLDR: Improved Safety Practices via extensive testing including but not limited to:

• unit tests
• integration tests
• testnet testing
• exhaustive edge case testing
• Multiple rounds of rigorous internal code reviews
• External code reviews

Summary As stated in the aforementioned medium article, the steps listed above will increase our operating costs, but security is our top priority which will ultimately lead to a more successful protocol. While audits are great, they are certainly not free. The cost to have an audit of our size is $60,000.

Plan With this being said, we are proposing to use the treasury to fund the cost of audit(s). In the past we have sold tokens from the treasury onto the open market for funds. This time around it will be done through an OTC (Over-The-Counter) trade of 125 COVER tokens to Yearn.

This OTC trade will be beneficial for the community in the following ways:

• it will not affect the current liquidity providers on DEXs
• Yearn will use COVER as collateral on C.R.E.A.M.
• Yearn will have increased governance participation for Cover

This plan allows obtaining funds to not only pay for audit(s), but further align us within the Yearn Ecosystem.