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The coverage ratio is vault specific, as we currently only have one vault it is as follows:
(msY Backing Assets + Insurance Fund ÷ Total msY Issued) transparently measures the protocol's ability to honor redemptions for the msY vault:
Coverage ≥100%: Full redemption value
Coverage <100%: Proportional redemption
The Insurance Fund receives 10% of every yield distribution, creating a growing reserve designed to absorb temporary shortfalls during market disruptions or unexpected hedge performance issues. This fund maintains 1:1 redemptions during adverse conditions until exhausted, providing an important buffer against strategy volatility.
A 0.2% fee on mint and redeems sustains protocol operations while remaining competitive for arbitrage. Mint and redeem fees are zero until $100m TVL.
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