Just like the traditional parametric cover products, Neptune Mutual cover pools provide guaranteed payouts upon triggering a set of the predefined event(s).
Cover purchasers are those who pay a fee to become policyholders. The policyholders will receive a special kind of token known as cxTokens or claim tokens. Theoretically, the
cxTokens could be cxDAI, cxUSDC, cxBUSD, etc. that represent a stablecoin. If a cover incident and resolution occurs, the user will be able to claim the cxDAI to receive an equal payout amount in DAI, minus the protocol fees.
Neptune is based on the parametric coverage model. It offers policyholders protection against loss resulting from a set event (also known as cover parameters). The policyholders pay a premium to get coverage for a fixed duration and desired amount. Once an incident occurs, as long as the parameters are triggered, and resolution is reached that the set event did occur, all cover purchasers are entitled to payout without being individually assessed. As a result, faster payout can be achieved given a claim does not need to go back and forth between the underwriters, claims assessors, loss adjusters, or any middlemen or centralized party; this helps platforms/cover creators to better manage their reputation and maintain their user base in the case of an incident occurrence.