Cega announces partnership with Credora to reduce counterparty trading risk
Cega Finance is excited to announce the partnership with Credora (former name: X-Margin), a credit evaluation solution for Cega’s institutional trading. As mentioned during EthCC, counterparty risk was a key trigger for the demise of the last DeFi cycle. Cega has come up with an innovative solution to work with Credora to KYC market makers, minimize counterparty risk, and increase security and safety to our users, while staying decentralized.
Why is Credit Analysis of Counterparties Important?
Counterparty risk is critical for all crypto users. How many times have we seen the consequences of protocols or institutional investors taking excessive positions in one investment, or becoming heavily reliant on one or two LPs? We all know the result — one protocol defaults and everyone else starts to collapse like dominoes.
We have taken the recent cases extremely seriously, and have been implementing the measures to reduce counterparty risk.
What is Credora?
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.
In tradfi, a designated intermediary called clearinghouses, helps facilitate a trade between a buyer and seller. The clearinghouse is the entity that facilitates credit for the sake of user safety. There are also margin desks that analyze counterparty balance sheets, generate credit ratings and determine necessary collateralization amounts per counterparty. We are asking Credora to do this in DeFi.
In a nutshell, Credora monitors institutional investors’ activity, including real-time assets and risk exposure to facilitate secure trading in crypto. Credora provides protocols with a credit rating and risk exposure limit per counterparty.
Since Credora closely monitors how much risk each MM is taking, we are confident in the size of trades we execute with our counterparties.
Cega and the DeFi Ecosystem
We believe that the partnership with Credora enables us to further secure the safety of the funds staked by our users. Transparency and integrity are more important than ever, not only for us but also for the entire defi ecosystem.
We hope that ongoing counterparty credit analysis and other measures that mitigate counterparty risk will become the market standard, as they will lead to more trust in the crypto market, increased user adoption, and prosperity for the entire crypto ecosystem.
To get to know more about Credora:
Interested in market making for Cega?
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