 # Questions about staking stats dashboard

Hello,

I have a few questions about the staking stats dashboard and would greatly appreciate some help.

Question #1:

I need help understanding cover pricing. I’ve read over the docs and don’t quite understand.

risk_cost = 1 - (net_staked_NXM/low_risk_cost_limit)^(1/7)
cover_price = risk_cost * (1+surplus_margin) * cover_period/365.25*cover_amount

I understand that the low_risk_cost_limit is set to 100,000. In this case, if there are only 1,000 NXM staked on a particular contract, then the risk cost would be 1 - (.01)^(1/7) = 0.48

And if someone wanted to purchase \$50,000 worth of coverage for a year, it would cost 0.481.350,000 = \$31,000.

So despite only 1,000 NXM of staking (~\$40,000), someone could conceivably purchase \$50,000 of cover. I understand almost nobody would do this because the cost of insuring \$50,000 would be \$31,000 and that seems like a bad deal.

But I’m assuming that the fact that the amount staked (\$40,000) is less than the coverage amount (\$50,000) is okay because the balance will be payed out of the capital pool in the event of a payout?

————————————

On the staking stats dashboard, how are the various parameters related to each other:

Question #2:

When a contract shows “needs staking”, what does that mean? Does it mean that the net_stake is fully “burdened” by the existing coverage, and only with new staking can people buy more coverage? If so, what is the upper limit of the purchase of cover based on existing net_stake?

Question #3:

If the net_staked = total_staked-50% x pending_staking_withdrawals, how can the net_staked ever be greater than the total_staked?

Question #4:

Why is the cover_price shown as a percentage rather than an absolute number? I’m assuming it means cover_price as the percentage of the cover_amount. Is this for a year? What is the formula? Is it simply the risk_cost expressed as a percentage?

Question #5:

How is the APY related to the cover_price expressed as a percent?