Syndicates
Managed underwriting vaults
TL;DR: Syndicates are the underwriting model on LayerCover. LPs deposit into a managed vault, and the Syndicate Manager handles quoting, allocation, and risk management.
Syndicates are ERC-4626 underwriting vaults. LPs provide capital, a Syndicate Manager prices and allocates risk, and the vault earns from policy premiums plus yield on idle capital.
How Syndicates Work
- You deposit USDC into a Syndicate vault and receive proportional shares
- The Manager allocates your capital across risk pools based on their strategy
- Premiums flow in as policies are sold from the backed pools
- Capital earns additional yield from whitelisted DeFi protocols via the CapitalPool
- You withdraw by redeeming your shares for the underlying USDC
How Syndicate Managers Underwrite
Syndicate Managers earn premiums by posting sell-side intents — signed, off-chain quotes offering coverage at specific rates. LayerCover uses a JIT (Just-In-Time) liquidity model: capital is not pre-allocated to pools. Instead, reservation and allocation happen atomically when a buyer accepts a quote.
The Flow
- Manager signs an intent — specifying pool, coverage amount, premium rate, and duration constraints. This is off-chain and costs no gas.
- Buyer submits a matching order — the off-chain matcher pairs compatible intents with orders.
- Atomic on-chain execution — the
IntentMatchercontract handles everything in one transaction:- Reserves capacity on the syndicate vault
- Allocates capital to the pool just-in-time
- Collects premium from the buyer
- Mints the policy NFT
- Capital is locked for the policy's duration, and the syndicate earns premium income.
JIT liquidity. Capital stays liquid in the syndicate vault until a buyer matches an intent. Idle capital can keep earning yield via the CapitalPool until it is needed to back a policy. Allocations are constrained by the syndicate's risk budget and leverage ladder, plus mutex group exclusivity for correlated pools.
Depositing & Withdrawing
Deposits
- Deposit USDC to receive Syndicate shares (ERC-4626)
- Shares represent your proportional claim on the vault's total assets
- No minimum deposit - enter at any time
Withdrawals
Withdrawals from syndicates are instant - redeem your shares for the underlying USDC at any time, subject to available liquidity.
Redeem syndicate shares whenever you want to exit available liquidity.
The vault pulls back any unlocked capital that is not actively backing live policies.
Once unlocked funds are available, the syndicate returns the underlying USDC to you instantly.
Solvency protection: Capital that is actively backing policies is locked and cannot be withdrawn until those policies expire or are settled. This prevents front-running claims without requiring a notice period.
Choosing a Syndicate
When evaluating syndicates, consider:
| Factor | What to Look For |
|---|---|
| Historical APY | Past performance of the vault |
| Pool Allocation | Which risk pools the manager is backing |
| Risk Rating Mix | Percentage in AAA vs lower-rated pools |
| Concentration | How large the biggest single pool is relative to vault principal |
| Manager Track Record | History of allocation decisions and losses |
| TVL | Total capital in the syndicate |
| Performance Fee | Configured fee on harvested yield routed to the fee recipient |
FAQ
Next Steps
Quotes stay off-chain until a buyer accepts them; reservation, allocation, and policy minting settle in one on-chain execution.
Signs a sell-side intent with pool, rate, duration, and size constraints.
Hosts the signed quote and matches it with a buyer order off-chain.
Submits a compatible order and triggers execution once pricing and terms align.
Executes `executeMatchedIntent()` and settles the underwriting path atomically.
Premium is credited to the underwriting side of the trade.
The buyer receives on-chain proof of coverage in the same transaction.