Cork Protocol Docs
  • Cork Overview
    • What is Cork?
    • What is a Depeg?
  • Core Concepts
    • Depeg Swap
    • Cover Token
    • Pegged Asset
    • Redemption Asset
    • Peg Stability Module
    • Liquidity Vault
    • Trading Market (AMM)
  • User Guides
    • Buy & Sell Cover
    • Redeem Cover
    • Mint Protected Units
    • Use Protected Units
    • Earn Premiums & Fees
      • Provide Vault Liquidity
      • Provide Short-Term Liquidity (AMM)
      • Provide Short-Term Cover (PSM)
  • FAQ
    • Frequently Asked Questions
    • Tips & Rewards
  • Integrate with Cork
    • Cork V1 Integration Guides
      • Overview
      • Quickstart
        • How to Open a Market
        • How to Deploy Liquidity
      • Use Cases & Snippets
  • Cork Smart Contracts
    • Cork Protocol V1
      • Overview
      • Live Deployments
      • Test Deployments
      • Audits
      • Formal Verification
  • External links
    • Website
    • X
    • Discord
    • Litepaper
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On this page
  • Why is Cork Needed Now?
  • How Cork Works
  • Getting Started with Cork
  1. Cork Overview

What is Cork?

Hey there! Glad to see you diving into the Cork rabbit hole and exploring our docs 👀

Cork is the protocol for tokenizing the risk of depeg events for stablecoins and liquid (re)staking tokens.

With Cork, you can hedge, trade, and earn against the risk of depeg events.

Why is Cork Needed Now?

Because the world’s assets are moving onchain, and robust markets need risk-management tools to grow.

One of the areas lacking an effective risk management framework is the pegged asset space— such as stablecoins and liquid (re)staking tokens that collectively represent hundreds of billions of dollars at stake.

Until Cork, there was no way to price or hedge against these risks. Cork tokenizes risk, allowing the market to price, trade, and hedge against depeg events.

The end result? A DeFi ecosystem with even more stability, transparency, openness, and financial opportunity.

How Cork Works

Core to the Cork protocol is the Peg Stability Module and its Depeg Swap, a novel asset that prices the risk of a depeg event, empowering crypto traders and funds to manage pegged-asset risk.

Each Cork market is structured as a token pair consisting of a redemption asset and a pegged asset. For example, in the ETH:stETH market:

  • The redemption asset is ETH

  • The pegged asset is stETH

Each Cork market operates with fixed-duration terms and is powered by the Peg Stability Module, which:

  • Mints Depeg Swaps and Cover Tokens with a set time to expiry

  • Runs an Automated Market Maker on Uniswap v4 to determine pricing

Additionally, each market has a Cork Vault, which automates liquidity deployment across consecutive terms. Traders can either buy a Depeg Swap to hedge against a depeg or buy a Cover Token to earn a fixed yield as long as no depeg occurs.

Getting Started with Cork

You’ll find more information here on how to:

✅ Learn about Depeg Events — what they are and what causes them

✅ Buy Depeg Swaps to hedge against a depeg event

✅ Buy Cover Tokens to earn a fixed yield (as long as no depeg occurs)

✅ Dive deeper into how the protocol works and the FAQ section

✅ Explore the Cork dApp and its features

✅ Integrate with the Cork Protocol and start building

Don’t get screwed—get Cork! 🚀

NextWhat is a Depeg?

Last updated 28 days ago