Cork — the tokenized risk protocol — is live in public beta on the Ethereum mainnet. Ethena is one of Cork’s key launch integrations, introducing the sUSDS:USDe and sUSDe:USDT risk market. The market lets users hedge, trade, and earn against the risk that USDe loses its correlation to sUSDS or that USDT loses its peg to sUSDe.

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Start with wETH:wstETH on Cork.

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About Cork

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Cork introduces a novel primitive to DeFi known as Depeg Swaps, which represents the risk associated with the peg stability of assets such as stablecoins like USDT and liquid staking tokens like stETH. Cork’s Depeg Swaps represent tokenized risk. Depeg Swaps can be traded against to protect positions or capture upside whether depeg happens or not. Cork was built to bring more opportunity to existing crypto markets, while also providing more financial instruments in preparation for the influx of real-world assets and institutional capital into crypto.

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Ethena x Cork

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Ethena is a synthetic dollar protocol built on Ethereum. Its first and biggest asset, USDe, is a fully collateralized yet synthetic crypto dollar. USDe is currently the third biggest stablecoin with over $6b in supply, surpassed only by USDT and USDC. Ethena USDe has a correlated value to the US dollar. sUSDS represents Sky USDS (a stablecoin upgraded from DAI) that has been deposited into the Sky Savings Rate protocol. “Savings USDS” (sUSDS) gives users a return on their deposits while still being able to use a stablecoin across DeFi. USDe and USDS are the third- and fourth-largest dollar-correlated assets, following USDT and USDC.

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Ethena’s continued dominance in the stablecoin ecosystem and trust, adoption, and value across DeFi is dependent on the capacity for USDe to retain its peg. However, depeg events (both big and small) have been inevitable in crypto’s past for every single kind of pegged asset.

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Cork’s launch of the sUSDS:USDe and the sUSDe:USDT risk markets is an evolution in the stability of and opportunities in the Ethena ecosystem. The markets will allow people to protect their USDe positions against a potential depeg risk (hedge), trade on the chance that USDe or USDT do lose their pegs, and earn by providing liquidity to either vault. This market dynamic gives a price to the risk that 1 USDe is not instantly convertible to 1 sUSDS or 1 USDT is not instantly convertible to 1 sUSDe.

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The result? More insight into the health of the Ethena ecosystem. The ability for people to protect their valuable USDe positions against a risk that is inherent to crypto. More financial instruments associated with the USDe asset. And, overall, an Ethena ecosystem defined by more stability, more opportunity, and more transparency.

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Starting with Cork x Ethena

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The Ethena sUSDS:USDe and sUSDe:USDT markets on Cork give users opportunities to protect their portfolios and earn based on the risk that USDe or USDT lose their pegs to sUSDS or sUSDe, relatively. Both markets will qualify for Ethena rewards. There are three main ways for users to get involved with the sUSDS:USDe and sUSDe:USDT risk markets on Cork.

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1. Hedge: Users who want to protect their USDe or USDT holdings against the risk of a depeg event can buy USDe or USDT Depeg Swaps. To do so, users can purchase tokens directly from the Cork app, or purchase Depeg Swaps from a DEX. In the event of a USDe depeg, USDe Depeg Swaps can be deposited back into Cork’s Peg Stability Module to redeem sUSDS on a 1:1 (i.e. pegged) ratio. In the event of a USDT depeg, USDT Depeg Swaps can be deposited back into Cork’s Peg Stability Module to redeem sUSDe on a 1:1 (i.e. pegged) ratio.
2. Trade: Users who want to trade the likelihood that USDe or USDT lose their pegs to sUSDS or sUSDe, respectively, can buy USDe or USDT Depeg Swaps or Cover Tokens that behave similarly to prediction markets. To do so, users can purchase tokens directly from the Cork app, or purchase these assets from a DEX. In the event of a USDe depeg, USDe Cover Token holders will be distributed all remaining assets in the sUSDS:USDe Peg Stability Module. In the event of a USDT depeg, USDT Cover Token holders will be distributed all remaining assets in the sUSDe:USDT Peg Stability Module.
3. Earn: Users who want to earn can provide liquidity to the sUSDS:USDe or sUSDe:USDT vaults. Providing liquidity to the vaults earns rewards through trading fees, risk premiums, and protocol fees.

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For a deeper understanding of how to start with Cork, see the Cork documentation. To dive right in and get started with Cork x Ethena, head to the Cork application.

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Want to partner with us to open a new Cork market pair? Connect with us here.

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