The rails for risk Price, hedge and transfer any observable onchain risk Backed by @RoadCapMgmt and @a16zcrypto CSX
Ethereum
Joined March 2024
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Cork has raised $5.5M to build the missing tokenized risk infrastructure for digital assets.
Led by @RoadCapMgmt and @a16zcrypto CSX, Cork has raised from investors who recognize the market opportunity of introducing tokenized risk into the digital asset ecosystem.
Three questions to ask before holding any onchain yield:
1) How long does it take to get cash out?
2 ) Which price do you get?
(饾槢饾槱饾槮 饾槹饾槸饾槮 饾樃饾槱饾槮饾槸 饾樅饾槹饾樁 饾槩饾槾饾槵饾槮饾槬 饾槹饾槼 饾樀饾槱饾槮 饾槹饾槸饾槮 饾樃饾槱饾槮饾槸 饾槳饾樀 饾槾饾槮饾樀饾樀饾槶饾槮饾槾?)
3) What happens if everyone asks at once?
If you can鈥檛 answer them, the liquidity risk is unpriced.
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"We build spikes: cheap versions of an idea that we can scrap easily. Maybe you build it eight times in a week. By the eighth, you understand the trade-offs."
@robdogeth on spikes: build a version of the idea, assess the trade-offs, scrap it, repeat.
When stress hits, everyone wants their money at once. A liquidity buffer is what lets a vault pay them. Here鈥檚 how traditional finance builds them, how DeFi has, and a live example of an external buffer in use 馃У
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When withdrawals spike, those tokens guarantee instant redemptions, however much collateral is deployed and whatever Morpho utilization or market depth looks like. The vault鈥檚 capital stays deployed, and LPs earn native yield plus a risk premium for providing the guarantee.
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DeFi scaled on liquid collateral, so most of it assumes an asset can be turned into cash quickly. RWAs, fixed-rate lending, cross-chain settlement and complex vaults break that assumption.
That鈥檚 liquidity risk: capital that can鈥檛 become cash without loss or delay 馃У
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Take ACRED, a tokenized Apollo credit fund. It inherits quarterly repurchase offers of at least 5% of shares, paid pro rata if requests exceed that, so exiting can take several quarters. The price is set at NAV on the pricing date, so redeemers carry NAV risk while they wait.
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The number one skill @robdogeth thinks AI won鈥檛 replace: agency.
Humans stay in the loop to decide what gets built and how. Specialization matters less, and developers increasingly look like product managers.
An agent can swap on Uniswap, lend and borrow on Morpho, and pay over x402. What it doesn鈥檛 have is a general function to call to transfer tail risk or buy protection against a strategy failing. Swapping, lending and paying all have interfaces. Risk management doesn鈥檛 yet.
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So what would that function look like? As a spec, for pegged assets: someone deposits collateral and gets two tokens. One lets its holder swap the pegged asset for that collateral at a known rate before expiry. The other takes the underwriting side in exchange for yield.
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