NY, NY, USA, September 9th, 2024,
Chainwire
Preparing for mainnet, Cork secures
investments from OrangeDAO, a16z CSX, Ideo Ventures, Steakhouse
Financial, Outliers Fund, and Unbounded Capital, among others to
accelerate launch
Cork Protocol, which has
built 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 speed up its early-stage go-to-market
strategy.
The missing piece that will bring
maturity to the emergent crypto financial system is competitive
market risk pricing, whether for insurance or efficient hedging.
One asset class that is sorely lacking these tools is crypto assets
that track a par value (stablecoins, LSTs, LRTs, etc). These often
experience ‘depegs’ or price deviations from par in secondary
markets. Notable cases include USDC in March 2023 or situations in
emerging technologies, such as the temporary depegs of Liquid
Restaking Tokens (LRTs). These events have the potential to cause
cascading liquidations across borrowing and lending protocols and
propagate risk across the system as a whole.
Cork Protocol introduces Depeg Swaps to bring the power of
competitive markets in risk pricing to crypto. Cork Protocol can be
used as part of a long-term buy-and-hold strategy by rolling
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 aid
crypto users and institutions in finding temporary price deviations
less frequent, shorter, and less severe. While Cork cannot
prevent black swan events, it offers investors a way to price risk
and insurance against both temporary and permanent
depegs.
Cork can offer institutional users of
liquid staking tokens, like stETH, access to competitively priced
and effective market insurance for slashing and liquidity risks.
Depeg Swaps are also designed for other crypto assets, including
stablecoins or restaking tokens, like eETH, for users who wish to
hedge more complex positions on-chain. Cork has received investment
from Web3 leaders, including a16z CSX, OrangeDAO, Ideo Ventures,
Outliers Fund, Unbounded Capital, Steakhouse Financial, and 20
other investors and angels from Tradfi and DeFi.
"A competitive marketplace to price smart contract,
slashing and liquidity risk could fundamentally improve the UX 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,” says McNut, Lido
Contributor.
“The market currently lacks the ability to price the
risk relating to the stacked infrastructure underlying pegged
assets,” says Phil
Fogel, Co-Founder of Cork Protocol.
“We’re excited to build a new DeFi primitive that is sorely 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 risk in real-time.”
Across the eight weeks in New York
City, Cork Protocol will benefit from tailored resources and
support, including mentorship from industry leaders, exposure to
the a16z network, and collaboration amongst other cohort members.
Participation in the CSX Fall 2024 cohort affords Cork Protocol the
chance to refine its Depeg Swaps product – the DeFi version of
TradFi’s Credit Default Swaps before the mainnet launch.
In conjunction with this announcement,
Cork Protocol is launching a Testnet Trading Competition starting
the week of September 17th. The competition will take place on the
Sepolia Testnet, allowing participants to test the protocol under
simulated conditions while competing for profits and reporting any
bugs found during the competition. A total of 1.75 ETH will be
awarded for tasks like 0.5 ETH to 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’re excited to invite DeFi enthusiasts, traders, and
developers to participate in our Testnet Trading Competition,” adds
Rob Schmitt, Co-Founder of
Cork Protocol. “This competition is a fantastic
opportunity for the community to engage with our platform,
contribute to its development, and win some great
prizes.”
"Credit Default Swaps (CDS) have been pivotal in
pricing risk in traditional finance and making it possible for
investors to hedge against corporate credit defaults,” says
Mona El Isa, founder and CEO
at Avantgarde Finance. “Cork Protocol applies the CDS
framework to DeFi, making it possible to price and hedge risks in
DeFi. There is a big need for this as Liquid Staking Tokens and
Liquid Restaking Tokens in particular grow.”
For more information about Cork
Protocol and to 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 backing of Cork
Protocol. Their innovative approach to stabilizing DeFi through
pegged asset exchanges is truly groundbreaking,” says Poseidon Ho, Founding Partner
at Outliers Fund. “We believe this will have widespread
applications for Liquid Staking Derivatives and Liquid Restaking
Tokens assets. Proud to be a backer of such an innovative
team.”
“Cork Protocol are a crazy smart team with a
zero-to-one vision. Cork's ability to hedge popular pegged assets
with unlimited liquidity depth will change the game for investing
and farming,” says 0xlogic, Castle Capital, and
DeWhales Capital.
About Cork
Protocol:
Cork Protocol is a
decentralized finance (DeFi) platform that introduces Depeg Swaps,
a new financial primitive designed to price and manage the risks
associated with pegged assets, such as stablecoins and liquid
(re)staking tokens. Cork Protocol aims to enhance liquidity, reduce
risk, and foster safer on-chain credit markets by providing tools
for both hedging and trading risk.
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Contact
Executive
Kyle
Heise
C3
kyle@cryptocontent.co