Cork Protocol

The Feb 21 Bybit hack rattled many in DeFi, sparking concerns over solvency and the security of exchange-based collateral. Yet Ethena’s robust risk framework—built on custodial safeguards, off-exchange settlement, and a $60M reserve—ensured USDe collateral remained protected. ?? Why does this structure matter? @ethena_labs employs Off-Exchange Settlement, partnering with custodians like Copper, Ceffu, and Cobo. This way, collateral never sits directly on a centralized exchange, significantly reducing counterparty risk. The protocol’s bankruptcy-remote design adds another layer of protection. Even if a partnered exchange were to fail, Ethena’s funds would be legally and operationally insulated, minimizing systemic threats to user assets. USDe’s $60M reserve fund is critical for handling extreme events. Whether it’s unsettled PnL losses or funding rate spikes, the reserve acts as a safety net. After the Bybit hack, around $30M of unsettled PnL was swiftly reduced to zero—an example of proactive risk mitigation. During this stress event, Ethena processed $120M in USDe redemptions without a hitch, backed by a hefty stablecoin buffer ($1.9B). Another $250M in unstaking is set to go through on Feb 28, demonstrating the protocol’s sustained operational resilience. Takeaway: Events like these highlight the vital need for robust risk frameworks in DeFi, especially for pegged assets like USDe. While Ethena’s approach provides strong safeguards, there’s still a gap for active, user-friendly tools that allow USDe holders to price, hedge, and manage the risk of depeg events. That’s exactly why Cork is launching Depeg Swaps on Ethereum Mainnet in Q1. By tokenizing depeg risk, Cork empowers USDe holders with the ability to price, hedge, and trade potential depeg scenarios—leading to a more resilient, safer, and mature DeFi ecosystem for everyone. Stay tuned!

The Cork team has just landed in Denver for @EthereumDenver ?? Come chat with @Philfog, @TheRealStone, and @leopoldbiget! DM us to connect ?? #ETHDenver2025

??? Phil Fogel, Founder, Cork Protocol Phil will discuss scaling decentralized stablecoins and explore new primitives that tokenize risk for more resilient systems. Hear it all at Stable Summit! ?? Denver ?? 26 Feb

The Cork team is thrilled to be heading to ETHDenver next week! Want some alpha on DeFi risk? Catch Phil Fogel speaking at both ETHDenver & Stable Summit! Meet Phil Fogel Anna Stone and Léopold Biget—we’re giving Cork Safety Kits, packed with next-level items to help you survive and thrive at ETHDenver! DM us to connect ?? #CorkSafetyKit

The Cork team will be at RWA Paris on Feb 13-14. Send us a DM to connect!

beraSTONE is currently experiencing a depeg from WETH on Uniswap V3 - trading at .99 WETH. Depegs happen, but the problem is that there’s no effective way to manage the risks of depegs in DeFi today. That’s why Cork is launching Depeg Swaps in Q1: a way to tokenize risk. Cork tokenizes risk thanks to Depeg Swaps. Depeg Swaps enable anyone to exchange a pegged or correlated asset (e.g., beraSTONE) at a 1:1 ratio for the redemption asset (e.g., WETH), allowing investors to price, hedge, and trade depeg risks. Cork helps users price the risk of depegs. By looking at the price of a Depeg Swap for a certain asset pair (WETH:beraSTONE), users get information on how the market perceives the risk of that asset depegging. A high Depeg Swap price indicates that the market perceives either a high depeg risk or a mispriced illiquidity discount, whereas a Depeg Swap price close to 0 indicates that the market perceives a low depeg risk. In the case of beraSTONE, Cork can function like a prediction market for depegs, helping users see how the market perceives the risk of beraSTONE depegging before any depeg occurs. Cork also enables users to hedge against depeg risks. For example, Loopers will be able to hedge their exposures which in this case would have prevented their positions from being liquidated. Cork is going live on Mainnet in Q1! To learn more, read our litepaper: https://lnkd.in/e6Mc7QbF

There is currently no accurate way to price the risk of stablecoin depegs. This is about to change. By tokenizing risk, Cork helps users price the risk of depegs. Here's how. In Q1, Cork is launching a new DeFi primitive called Depeg Swaps. Depeg Swaps enable users to exchange a pegged asset (e.g., USDe) for a redemption asset (e.g., USDC) at a 1:1 ratio, permissionlessly. Cork helps users price the risk of depegs. By looking at the price of a Depeg Swap for a certain asset pair (USDC:USDe), you get information on how the market perceives the risk of that asset depegging (in this pair, USDe). A high Depeg Swap price indicates that the market perceives a high depeg risk, whereas a Depeg Swap price close to 0 indicates that the market perceives a low depeg risk. Cork can function like a prediction market for depegs, helping users see how the market perceives risks for pegged assets. Cork is going live on Mainnet in Q1! To learn more, read our litepaper here: https://lnkd.in/e6Mc7QbF

Depeg Swaps are coming to Ethereum in Q1. What are they and how will they impact DeFi? Depeg Swaps are a new DeFi primitive enabling DeFi participants to price, hedge, and trade depeg risks. With Depeg Swaps, Cork is building the infrastructure for a safer and more resilient ecosystem. In DeFi, many assets—like stablecoins, liquid (re)staking tokens, as well as certain RWAs—are intended to maintain a 1:1 value against a benchmark asset, whether that’s USD, ETH, or BTC. The reality is, sometimes this isn’t the case, causing market disruption. A Depeg Swap is Cork Protocol’s solution for permissionlessly exchanging a pegged asset (e.g., sUSDe) for its redemption asset (e.g., USDC) at a 1:1 ratio, at any time. Depeg Swaps become especially valuable if a depeg occurs. On the opposite side, the Cover Token assumes the risk of a depeg but earns yield in return, effectively acting as the “underwriter.” Depeg Swaps provide coverage from the smallest temporary depegs to the largest black swan events and thus have a range of applications: - risk-pricing - hedging - trading opportunities - DeFi integrations To learn more about Cork and Depeg Swaps, read our litepaper: https://lnkd.in/e6Mc7QbF

How can Cork help during depegs? Cork allows funds and crypto traders to protect themselves against depeg risks with a new DeFi primitive called Depeg Swaps. Here’s how it could have worked for the USD0++ depeg ?? First, a Depeg Swap grants you the right to exchange a pegged asset (like USD0++) for a redemption asset (like USDC) at a 1:1 ratio, permissionlessly and at any time. It supports three main use cases: pricing, hedging, and trading the risk of depegs. Cork helps users price the risk of depegs. By looking at the price of a Depeg Swap for a certain asset pair (USDC:USD0++), you get information on how the market perceives the risk of that asset depegging. A high Depeg Swap price indicates that the market perceives a high risk, whereas a Depeg Swap price close to 0 indicates that the market perceives a low depeg risk. In the case of USD0++, Cork could have functioned like a prediction market for depegs, helping users see how the market at large perceives risks for USD0++. Cork also enables users to hedge against depeg risks. In the case of USD0++, users who would have bought Depeg Swaps could have exchanged their Depeg Swaps plus USD0++ for USDC at any time, thus hedging against the depeg risk. Cork is going live on Mainnet in Q1! To learn more, read our litepaper: https://lnkd.in/e6Mc7QbF

More than 10,000 transactions were executed during the 2nd Testnet Trading Competition, a 70% increase in activity compared to the first Competition! The prizes have now been distributed, with 2 ETH split among the 9 winners and each winner receiving 1 NFT. Check your wallet! On top of that, all participants can claim their POAP NFTs here to finalize their participation: https://lnkd.in/eBsYrm3m