The Cover Amount is the maximum payable compensation by the insurance company when a claim is made.

In general, the cover amount is the amount of collateral that is used to cover the value of the loan or other financial instrument, and it is typically expressed as a percentage of the total value of the loan.

For example, if a user takes out a loan worth 100 units of a particular cryptocurrency, and they deposit 50 units of the same cryptocurrency as collateral, their cover amount would be 50%, since the value of the collateral is equal to half the value of the loan.

The cover amount is important because it determines the level of risk for both the lender and the borrower.

In general, a higher cover amount indicates a lower level of risk for the lender, since there is more collateral available to cover the value of the loan in the event that the borrower is unable to repay it. On the other hand, a lower cover amount may indicate a higher level of risk for the borrower, since there is less collateral available to cover the value of the loan, and they may be at greater risk of losing their collateral if they are unable to repay the loan.

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