Credora and Cega Form Credit Evaluation Partnership to Facilitate On-Chain DeFi Derivatives
Credora’s credit evaluation will reduce the inherent risk of Cega Fixed Coupon Note (FCN) lending to Market Makers.
August 4, 2022 — Cega is on a mission to create superior, flexible, and diversified investment opportunities for every Web3 investor. They are developing new capabilities in tech, token contracts, and data modeling that will enable the next evolution of DeFi derivatives through their decentralized platform. Credora is partnering with Cega to conduct credit evaluations using privacy-preserving technology on the market makers who provide pricing on Cega derivatives. The partnership will accelerate the adoption of DeFi derivatives on the blockchain by using proven methodologies to reduce inherent counterparty risks.
Cega is building a suite of exotic options products for investors starting with the protocols exotic derivative fixed coupon notes (FCN). The protocol allows investors to provide capital (aka “principal”) to the FCN note issuer (market maker), who promises to pay yield (“interest”) periodically and return the principal when the note expires. The Market Makers are onboarded through Credora’s platform, which evaluates sensitive on-chain and off-chain financial information as part of a credit evaluation. The technology powering real-time components of the credit evaluation is provably neutral and verifiable. The creditworthiness of the Market Makers is updated in real-time data to ensure Cega investors have appropriate counterparties.
Credora services have a proven track record across various DeFi applications. Credora’s evaluation encompasses real-time risk monitoring, KYC and financial statement analysis. Similar to other applications, Cega gains transparency of the Market Makers risk through Credora’s privacy-preserving credit oracle.
For Market Makers
The Market Makers must onboard through Credora before they can participate in the bidding process for the Cega derivatives. The Credora credit evaluation process captures data across their CeFi and DeFi holdings to generate a credit rating and additional borrow capacity, which is factored into Cega’s bidding limits. The Market Makers that provide complete real-time metrics increase their opportunity for a higher credit rating.
For Cega Investors
Investors in the Cega protocol will have the ability to initially participate in the open FCN baskets that have varying underlying assets. Investors have the benefit of choosing the asset within the basket to invest and gaining diversified exposure across the asset basket. Through the partnership with Credora, Cega will have access to more data on the Market Makers to make informed decisions on who will win the FCN derivative. Investors benefit from the added credit evaluation, which ensures their capital is with a creditworthy market maker.
Arisa Toyo, CEO of Cega, said:
“Cega values counterparty risk analysis to make sure their partners are able to handle exotic derivatives on their balance sheet. Credora’s privacy-preserving credit evaluations will provide the borrower’s credit rating and borrow capacity per market maker to help create a safer DeFi ecosystem.”
Darshan Vaidya, CEO of Credora, said:
“We are excited to be a part of Cega’s decentralized derivative products for the crypto ecosystem through the use of our privacy-preserving credit evaluations. Credora evaluations of the borrower’s creditworthiness will help facilitate transparent and efficient derivative lending on Cega.”
Cega is a decentralized exotic derivatives protocol. Cega is building exotic options structured products for investors that generate superior yield and offer built-in protection against market downturns. Cega is developing new capabilities in tech, token contracts, and data modeling that will enable the next evolution of DeFi derivatives.
Credora enables data-driven and transparent lending across CeFi and DeFi. The team has developed private credit infrastructure that evaluates the real-time creditworthiness of borrowers while protecting sensitive data. To date, Credora has facilitated $750m+ in uncollateralized loans across 70+ borrowers & lenders with clients and can help well-capitalized, risk-managed borrowers borrow transparently and securely. Credora currently monitors over $4 billion of borrower assets with a coverage of 85% of CeFi volumes while covering DeFi and staking activity from 14 EVM compatible chains and Solana. Credora (X-Margin) raised $8 million in a Series A funding round backed by leading digital asset investors. For more information on Credora, please visit credora.io.