Coverage

KPK's curated vaults offer discretionary cover so that depositors can hold a covered position that responds to certain technical and economic loss events. Cover is an optional, vault-level feature: it does not change how a vault is curated, allocated, or monitored, and it sits alongside the controls described in the Risk framework.

The cover is provided through a partnership between Nexus Mutual and OpenCover. KPK arranges and maintains the cover for its vaults. Three parties are involved, with distinct roles.

Party	Role
Nexus Mutual	Underwriter and risk carrier. Provides the discretionary mutual cover that stands behind the covered position, and assesses and decides claims under its cover terms.
OpenCover	Distributor and broker. Builds and operates the Covered Vault contracts through which the cover is arranged, priced, and maintained. OpenCover distributes Nexus Mutual cover; it is not the risk carrier.
KPK	Curator. Has arranged cover for its vaults. KPK is not the provider, does not bear the risk, and does not guarantee any payout.

The Covered Vault contracts are built on tokenised-vault standards and have completed independent security audits (Nethermind and Sherlock). For the contract-level detail, see the OpenCover documentation.

How the cover works

OpenCover's Covered Vaults wrap a vault position with cover at the contract level, so a depositor activates cover by depositing rather than by arranging cover separately.

1

Covered Vault wrapper

A depositor enters through an OpenCover Covered Vault, a contract that wraps the underlying KPK-curated vault. The depositor keeps the same underlying exposure, strategy, and yield as the uncovered vault.

2

Cover activation

Cover is activated by depositing into the Covered Vault, without leaving the vault interface or arranging cover separately. Exiting the Covered Vault ends the cover on that position.

3

Premium streaming

The premium streams continuously from the position's yield, with automatic renewal and no minimum term. The depositor pays only for the duration of the cover held.

For Covered Vaults, OpenCover administers the cover programmatically as the Covered Vault Manager, so depositors are not required to file claims individually. Claims are reviewed by Nexus Mutual's Claims Committee following a cool-down period.

Scope

Cover responds to specific technical and economic loss events affecting the covered position, as defined in the Protocol Cover terms. The cover responds to a loss of funds caused by any of the following, as defined in the cover wording:

Event	Description
Smart contract exploits	A code bug or error that causes the designated protocol to be used in an unintended way.
Oracle failure	Incorrect price-feed data used by the protocol's contracts, where the error exceeds 1% for stablecoin-related oracles or 2.5% for other assets, arising from faulty configuration, missing safeguards against unauthorised updates, or feeds that fail to update.
Oracle manipulation	Price-feed data that is deliberately corrupted and leads to a loss of funds.
Liquidation failure	Keepers cannot liquidate collateral backing unhealthy borrow positions, resulting in bad debt socialised across lenders in the affected market, or they liquidate that collateral for less than 80% of fair realisable market value.
Governance takeovers	A malicious actor forces through a malicious upgrade to a designated protocol contract.

Covered Vaults do not cover all losses, and they do not eliminate risk. Market movements, yield variation, and other events outside the cover wording are not covered, and the cover is subject to exclusions and a deductible.