# Protocol Overview

Athena is a decentralized insurance protocol that uses innovative tokenization to manage liquidity positions and cover contracts. Our system revolves around two main types of ERC-721 (NFT) tokens, each representing a unique user "contract" within the protocol.

The use of ERC-721 tokens allows Athena to incorporate detailed and customized parameters for each cover and liquidity position while maintaining a familiar token-based interaction for users. Unlike standard ERC-20 tokens, these NFTs can store complex, individualized data structures, enabling specific coverage limits, or unique liquidity allocation strategies.

This approach combines the flexibility of customized contracts with the user-friendly experience of token management, making sophisticated insurance and liquidity provision accessible through everyday blockchain interactions. Additionally, it ensures unique identification and seamless transferability of user rights within the protocol, enhancing both security and convenience for Athena's users.

## Tokenized Contracts in Athena

1. **Liquidity Position NFT**: Represents a user's stake in the protocol's cover pools.
2. **Cover NFT**: Represents a user's insurance coverage.

These NFTs serve as proof of ownership for liquidity positions and cover contracts, enabling easy identification and interaction with the protocol.

## Key Protocol Interactions

### For Cover Buyers

1. Users request to open a cover by depositing ERC-20 tokens as premiums.
2. Athena checks cover requirements and mints an ERC-721 Cover NFT to the user.
3. To claim, users request to open a claim using their Cover NFT.
4. Athena verifies ownership and processes the claim, refunding ERC-20 tokens if valid.

![Purchasing Covers & Making Claims](/files/57o94h73iGSpHYmKP7WJ)

### For Liquidity Providers

1. Users request to open a position by depositing ERC-20 tokens as liquidity.
2. Athena adds liquidity to cover pools, places it in DeFi strategies, and mints an ERC-721 Position NFT to the user.
3. Users can request withdrawals or take interests using their Position NFT.

![Managing Liquidity Positions](/files/1jjPfGqIgKEBoqW5kJ4B)


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