New York, New York, USA, September 9, 2024, Chainwire
Cork, which is preparing for mainnet, secures investments from OrangeDAO, a16z CSX (NASDAQ:), Ideo Ventures, Steakhouse Financial, Outliers Fund, and Unbounded Capital, among others, to accelerate launch
Cork Protocol, which has created the new DeFi primitive similar to credit default swaps for pegged crypto assets, today announces its participation in the a16z Crypto CSX Fall 2024 cohort. Backed by investors including OrangeDAO and Ideo, Cork Protocol’s participation in the 8-week program aims to accelerate its early-stage go-to-market strategy.
The missing piece that will bring maturity to the emerging crypto financial system is competitive pricing of market risk, whether for insurance or efficient hedging. One asset class that lacks these tools are crypto assets that track a nominal value (stablecoins, LST, LRT, etc.). These often experience “unpegging” or price deviations from nominal value in secondary markets. Some notable cases include USDC in March 2023 or situations in emerging technologies such as temporary unpegging of Liquid Resttaking Tokens (LRT). These events have the potential to cause cascading liquidations across lending and borrowing protocols and spread risk throughout the system as a whole.
Cork Protocol introduces Depeg Swaps to bring the power of competitive markets in risk pricing to cryptocurrencies. Cork Protocol can be used as part of a long-term buy-and-hold strategy by rolling over hedges, as a yield enhancement for underwriters of the hedged asset, or as part of a collateral stack for lending and borrowing. The Cork Protocol team hopes that using the platform will help cryptocurrency users and institutions find less frequent, shorter, and less severe temporary price deviations. While Cork cannot prevent black swan events, it does offer investors a way to price risk and insurance against temporary and permanent decouplings.
Cork can offer institutional users of liquid staking tokens such as stETH access to effective, competitively priced market insurance against slashing and liquidity risks. Deep Swaps are also designed for other cryptoassets, including stablecoins or resttaking tokens such as eETH, for users looking to hedge more complex on-chain positions. Cork has received investments from Web3 leaders including a16z CSX, OrangeDAO, Ideo Ventures, Outliers Fund, Unbounded Capital, Steakhouse Financial, and 20 other Tradfi and DeFi investors and angel investors.
“A competitive market for pricing smart contracts, reducing liquidity risk, and mitigating risk could fundamentally improve the user experience of interacting with stETH. There are many potential synergies across the ecosystem for a protocol that can help protect against one or more of these risks,” he says. mc nutLido contributor.
“Currently, the market lacks the ability to price the risk associated with the accumulated infrastructure underlying the linked assets,” he says. Phil FogelCo-founder of Cork Protocol. “We are excited to create a new DeFi primitive that is urgently needed in the market to help create greater stability and efficiency in DeFi. With our protocol, the market will be able to price, hedge, and trade risks in real-time.”
During its eight-week stay in New York City, Cork Protocol will benefit from personalized resources and support, including mentorship from industry leaders, exposure to the a16z network, and collaboration among other cohort members. Participation in the CSX Fall 2024 cohort provides Cork Protocol with the opportunity to refine its Depeg Swaps product, the DeFi version of TradFi’s Credit Default Swaps, ahead of mainnet launch.
Along with this announcement, Cork Protocol is launching a Testnet trading competition that will begin the week of September 17th. The competition will be held on the Sepolia Testnet, allowing participants to test the protocol under simulated conditions while competing for profits and reporting any bugs they encounter during the competition. A total of 1.75 ETH will be awarded for tasks with 0.5 ETH for the trader with the highest overall profit, 0.25 ETH for the most profitable liquidity provider, and 0.1 ETH for the best bug report.
“We are excited to invite DeFi enthusiasts, traders and developers to participate in our Testnet trading competition,” he adds. Rob SchmittCo-founder of Cork Protocol“This competition is a fantastic opportunity for the community to interact with our platform, contribute to its development and win great prizes.”
“Credit default swaps (CDS) have been instrumental in pricing risk in traditional finance and have made it possible for investors to protect themselves against corporate credit defaults,” he says. Mona El IsaFounder and CEO of Avantgarde Finance“The Cork Protocol applies the CDS framework to DeFi, enabling pricing and hedging in DeFi. There is a huge need for this as liquid staking tokens and liquid resttaking tokens in particular grow.”
To learn more about Cork Protocol and participate in the Testnet Trading Competition, readers can visit the Cork Protocol website and join the conversation on Discord.
What others are saying about Cork:
“We are thrilled to announce our support of Cork Protocol. Their innovative approach to stabilising DeFi through pegged asset exchanges is truly revolutionary,” he says. Poseidon HoFounding partner of Outliers Fund“We believe this will have broad applications for Liquid Staking Derivatives and Liquid Restaking Tokens assets. We are proud to support such an innovative team.”
“Cork Protocol is a very smart team with a zero-to-one vision. Cork’s ability to cover popular pegged assets with unlimited liquidity depth will be a game-changer for investment and farming,” he says. 0xlogicCastle Capital and DeWhales Capital.
About the Cork Protocol:
Cork Protocol is a decentralized finance (DeFi) platform that introduces Depeg Swaps, a new financial concept designed to price and manage the risks associated with pegged assets such as stablecoins and liquid (re)staking tokens. Cork Protocol aims to improve liquidity, reduce risk, and foster safer on-chain credit markets by providing tools for both hedging and trading risk.
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ContactExecutiveKyle HeiseC3[email protected]
This article was originally published on Chainwire
