Cork Protocol

Cork introduces a new primitive for tokenized risk, serving as a programmable risk layer for onchain assets such as vault tokens, yield-bearing stablecoins, and liquid (re)staking tokens.

Cork Protocol is building the risk infrastructure needed to bring institutional capital into onchain credit markets. With Cork, asset managers, curators, and issuers can spin up custom swap markets that enhance redemption liquidity, risk transparency, and market confidence for their onchain assets.

What does Cork do?

Cork use cases include:

Liquidity buffer for duration assets (e.g., yield vaults)
Depeg protection
Peg stability enhancement for asset issuers
LST/LRT slashing insurance
Slippage insurance
Onchain credit default swaps for TradFi debt
Risk tranching for DeFi protocols

Cork's novel primitive introduces a tokenized risk layer that can:

Serve as a liquidity buffer for vaults, aggregators, and AMMs
Hedge risks of holding stablecoins, LST/LRTs, RWA tokens, and more
Provide slippage / slashing insurance
Plug directly into the DeFi composability stack

How does Cork work?

Cork serves as a programmable risk layer for onchain assets such as vault tokens, yield-bearing stablecoins, and liquid (re)staking tokens. Cork markets enable users to price, trade, and hedge risk onchain by:

Buying protection against asset-specific risks (e.g. depegs, slashing events, etc.)
Taking the other side of the trade by providing capital to earn fixed premiums

At the heart of Cork Protocol is the Cork Pool, which issues two assets per unit of deposited collateral:

Cork Principal Token (CPT): Residual claims on collateral; paid out at expiry
Cork Swap Token (CST): Tokenized derivative granting the right to redeem collateral under specific depeg conditions

How do these assets work together?

1 Collateral Asset → 1 CPT + 1 CST
Users can always recombine 1 CPT + 1 CST to reclaim the Collateral Asset before expiry

Who is Cork backed by?

Cork is backed by a16z crypto, OrangeDAO, and Steakhouse Financial and partnered with Lido, Galaxy Digital, and EtherFi, among others.

Use Cases

Yield Opportunity for Onchain Liquidity Providers

Cork gives LPs a novel way to earn high risk-adjusted returns by underwriting risk on stablecoins, LSTs, RWA credit, and vault tokens. By holding Cork Principal Tokens in the Cork Protocol, LPs act as the counterparty to users seeking protection - earning yield from both the collateral assets and risk premiums. This is meant for crypto-native LPs seeking attractive fixed yields on stablecoins or ETH, as well as institutions comfortable underwriting onchain risk with defined downside - if Cork Swap Tokens are exercised, they may receive vault tokens or pegged assets in place of base collateral. There is no oracle dependency; redemption logic is deterministic and onchain.

Guaranteed Instant Liquidity for Vaults

As vaults, bridges, and structured products increasingly deploy assets to semi-liquid pools to earn yield, they must also manage redemption pressure, tail risks, and the need for on-demand liquidity. Cork provides a programmable risk buffer and redemption layer via the Cork Pool, helping vaults and bridges offer higher yields without sacrificing user confidence or withdrawal guarantees.

More Resilient Assets for Onchain Issuers

Cork helps stablecoin, LST, RWA, and vault token issuers build resilient pegs, monetize volatility, and improve capital efficiency. By integrating Cork’s Peg Stability Module (PSM), asset issuers gain a programmable risk layer to defend, stabilize, and scale their ecosystem.

Last updated on Jul 21, 2025

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Cork introduces a new primitive for tokenized risk, serving as a programmable risk layer for onchain assets such as vault tokens, yield-bearing stablecoins, and liquid (re)staking tokens.

Use Cases

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