Cork Protocol
DeFi protocol for tokenizing and trading pegged asset risk.
| Date | Investors | Amount | Round |
|---|---|---|---|
* | N/A | Early VC | |
| Total Funding | 000k | ||
Cork Protocol is a decentralized finance (DeFi) primitive for tokenizing, pricing, and trading the risk of depeg events for assets like stablecoins and liquid (re)staking tokens. Founded in 2023 by Phil Fogel and Rob Schmitt, the company aims to enhance stability and expand on-chain credit within the DeFi ecosystem. Schmitt, a serial entrepreneur, previously co-founded a company in satellite data and AI before moving into the Web3 space with a project tokenizing carbon assets. Fogel serves as a Co-Founder, Schmitt as Co-Founder, Anna Stone as COO, and Nelson Melina as Head of Engineer.
The protocol’s core offering is the "Depeg Swap," a novel financial asset analogous to a credit default swap (CDS) in traditional finance. This instrument allows crypto traders, funds, and institutional users to hedge against the risk that a pegged asset, such as a stablecoin or a liquid staking token (LST), deviates from its intended 1:1 value with a redemption asset. Users can buy Depeg Swaps to protect their portfolios or take speculative positions on potential depegs. The protocol also offers "Cover Tokens" for those willing to underwrite the risk, earning a yield in return. This mechanism allows the market to price risk in real-time.
The business model revolves around generating fees from trading activities within its markets. Liquidity providers deposit assets into Cork's Liquidity Vaults and earn rewards from a combination of trading fees, risk premiums, and protocol fees. The protocol launched its public beta on the Ethereum Mainnet in March 2025. Cork Protocol has received investments from venture capital firms including Andreessen Horowitz (a16z), IDEO CoLab Ventures, and Orange DAO, and participated in the a16z Crypto Startup Accelerator (CSX) in the fall of 2024.
In May 2025, the protocol experienced a significant security exploit, resulting in a loss of approximately $12 million due to a vulnerability in a smart contract. Co-founder Phil Fogel confirmed the incident and announced that all contracts were paused for investigation, with plans to relaunch the protocol and restore user funds.
Keywords: DeFi, tokenized risk, depeg swaps, pegged assets, stablecoins, liquid staking tokens, crypto risk management, on-chain credit, blockchain finance, Phil Fogel, Rob Schmitt, Andreessen Horowitz, crypto derivatives, decentralized insurance, smart contracts, peg stability, LST, LRT, crypto hedging