The Edge Podcast

Can DeFi Handle The Next Depeg? How Cork is Pricing The Risk

Mar 21, 2025
Guest
Phil Fogel
Phil Fogel, Co-founder and CEO of Cork Protocol, discusses innovative risk management in DeFi. He explains how Cork enables users to hedge against stablecoin depegs, unlocking new trading opportunities. Insights on the systemic risks of USDT and how Cork could have mitigated the Luna UST depeg are intriguing. Phil also dives into the concept of risk premiums and explores user dynamics that appeal to both traders and institutions, emphasizing the importance of technology in ensuring market stability.
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ANECDOTE

Phil's early career

  • Phil Fogel's first job was on the American Stock Exchange trading options, giving him early insights into finance and derivatives.
  • He later discovered Bitcoin through a BitInstant partner and explored arbitrage trading before focusing on crypto full-time.
INSIGHT

DeFi's risk problem

  • Pegged assets, including stablecoins and LSTs, represent IOUs with inherent credit, infrastructure, leverage, and liquidity risks.
  • DeFi, before Cork, lacked infrastructure to price these risks and create effective mitigation strategies.
INSIGHT

Tether: Systemic Risk

  • Tether's lack of transparent audits raises concerns about its true backing and ability to handle mass redemptions.
  • A Tether collapse poses systemic risk to DeFi due to its widespread use as collateral and in various protocols.
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