Underwriter Onboarding
The following outlines the process for onboarding Underwriters to Shared Security Networks (SSNs) in Cap's protocol. Onboarded Underwriters may delegate to Borrowers approved in the Cap system.
1. Setup
Ensure you have:
Borrower Address: Borrower's Ethereum address that will receive delegations. The Borrower must be already registered in Cap's system. The list of current Underwriters can be found here.
Underwriting Premium: Agree on a fixed rate to receive from the Borrower
Collateral Asset: The asset to be used as vault collateral (ETH/BTC-denominated ERC20s)
2. Choose SSN
Select SSN of choice for delegations, and follow the corresponding onboarding guide to complete set up and start delegating.
Collateral management, i.e. delegations and withdrawals, are handled within each SSN. Underwriters are advised to monitor delay periods specific to the SSN.
Withdrawing delegations immediately lowers coverage. Delegated assets in the withdrawal queue are liquidatable until the end of the withdrawal delay. Hence, a withdrawal below the liquidation threshold makes the delegation asset liquidatable.
While a time buffer is in place to mitigate risk, it is recommended that Underwriters whitelist depositors to prevent malicious/accidental withdrawals that may trigger unintended liquidation.
3. Complete Legal Agreements (Optional)
Borrowers and Underwriters may enter into legal agreements outlining terms of delegation, responsibilities, and compliance.
4. Updating Parameters
To update the Underwriting Premium or the LTV for the Borrower, request a change to the Cap team.
Namely, the underwriting premium can be updated via the setRestakerRate function, and the LTV and LT via the modifyAgent function.
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