Protection Rate
The protection rate is a contract-specific parameter that determines the percentage of impermanent loss protection afforded to NIL contract buyers.
A protection rate of 100% means that there is full protection up to the maximum protection level for Token A price movements of [-100%, +300%] against the strike price.
NIL has all contracts parameterized at a 100% protection rate to start.
The protection rate parameter can be lowered per-contract by protocol governance in the future, which should lower funding costs for Buyers while increasing returns for Writers.
Last modified 7mo ago