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Carapace
Carapace is a DeFi protocol building decentralized protection against credit default risk (similar to credit default swaps) for under-collateralized crypto lending pools. It connects protection buyers (lenders on protocols like Goldfinch) who pay premiums to hedge default risk with protection sellers who deposit capital to earn yield in exchange for taking on that risk.
Distributed
Description
Carapace Protocol is a non-custodial automated market maker that creates markets for swapping default risk on under-collateralized DeFi loans, functioning much like decentralized credit default swaps. Each pool contract bundles lending pools from under-collateralized lending protocols such as Goldfinch, Maple Finance, and TrueFi for diversification. Protection buyers, who are lenders in these underlying lending pools, pay a premium to hedge against borrower default and receive payouts up to their principal loss if a default occurs. Protection sellers deposit capital into pools to earn leveraged yields from premiums (and eventually CARA token rewards and rehypothecation income), receiving an interest-bearing sToken representing their deposit. The protocol launched its first pool in partnership with Goldfinch and had its smart contracts insured/audited by Sherlock for up to $5M. Carapace is backed by investors including NFX, Tribe Capital, Ledger Prime, GSR Ventures, Titan Capital, and Synthetix founder Kain Warwick, and was built by Starlings Lab, the R&D company behind the protocol. Its target clients are DeFi lenders and yield-seeking investors looking for risk-adjusted exposure to under-collateralized crypto and real-world-asset lending.Grant Funding
VC Funding
None
2022
$0
$2.5M