This product is not scored on the Raccoon matrix: it is an audit warranty for audited code only, bought exclusively by a protocol team, not a cover product a retail user can compare against Nexus Mutual's rubric. See the full reasoning on the analysis page. What follows is still real: red flags, open questions and sources.
No complete public product terms: coverage is governed by private, per-engagement agreements. Under the Raccoon methodology this alone triggers an automatic warning.
No public information about the capital backing payouts, and Sherlock itself disclaims guaranteed availability of funds: the second automatic warning.
The 2023 Euler payout consumed roughly 90% of reserves per press reporting; the current balance of the staking pool is readable live above. The old capital model effectively died with its first big claim.
The first two claim instances (Bounty Judge, claims committee) are Sherlock-internal or Sherlock-appointed; independence only begins at UMA, behind a roughly $15k escalation fee.
End users are never entitled to anything: payouts go to protocol teams, and Sherlock explicitly warns that users should not assume reimbursement.
The auditor insures its own audit: if a covered exploit occurs, Sherlock pays for its own miss. That aligns incentives before launch but creates a conflict of interest in claims assessment.
Points this analysis could not verify. Anyone buying significant cover should clarify these first.
Analysis as of 2026-07-28. Not affiliated with Sherlock. Informational only, no legal, investment or insurance advice.