In a significant advancement for decentralized finance, Cork announced the successful closing of a $5.5 million seed funding round, spearheaded by Road Capital alongside a16z CSX. This round also engaged a diverse group of investors including 432 Ventures, BitGo Ventures, Cooley, DEPO Ventures, Funfair Ventures, G20 Group, Gate Labs, Hyperithm Gate, IDEO Ventures, PEER VC, Stake Capital, and WAGMI Ventures. The capital injection is aimed at propelling Cork's mission to define and build tokenized risk infrastructure essential for the maturation of onchain financial markets.
The capital raise represents a foundational step in the nascent category focused on tokenized risk within blockchain finance, presenting innovative solutions for risk pricing, hedging, and liquidity management applicable across stablecoins, vault tokens, and RWAs. As institutional interest escalates in onchain yield opportunities, the market has witnessed stablecoin issuance more than doubling since 2024, exceeding $250 billion in circulation. Concurrently, real-world assets on the blockchain have expanded over twenty-fold, encompassing tokenized treasuries, private credit instruments, and structured products moving to onchain formats. Despite such expansion and active exploration of tokenization strategies by traditional asset managers overseeing assets valued in the tens of trillions, decentralized finance's underlying risk infrastructure remains underdeveloped.
This infrastructural gap has been accentuated by recent events highlighting stablecoin depegging and liquidity stress, exposing vulnerabilities that underscore the urgent need for institutional-caliber risk solutions. Cork's approach institutes a new core primitive designed as a programmable risk layer compatible with various onchain asset types, including yield-bearing stablecoins, vault tokens, and RWAs. Utilizing this primitive, asset managers and issuers are empowered to develop bespoke swap markets that improve redemption liquidity, foster enhanced risk transparency, and bolster market confidence in their onchain assets.
Key capabilities unlocked by Cork include standardized and consistent risk valuation methodologies across diverse onchain assets, allowing risks to be measured and compared effectively across protocols. The protocol also provides market-oriented hedging tools addressing duration risk, liquidity risk, and stablecoin depeg scenarios, thus enabling proactive risk management during stress conditions. Furthermore, Cork implements redemption liquidity backstops that facilitate near-instant, atomic liquidity access for RWAs and other yield-generating assets. This functionality bridges the challenges tied to offchain settlement delays and mitigates risks from cascading liquidity failures.
Designed for composability, Cork integrates seamlessly with ERC-4626 vault standards and other yield-bearing ERC-20 assets, broadening its applicability to a range of onchain credit structures and enabling risk management to become an intrinsic, programmable element within the onchain yield ecosystem. Phil Fogel, Cork’s Co-Founder, emphasized the shifting industry perspective, stating, "Tokenized risk is a conversation the industry has largely not been having over the past few years, and that is now changing with the onboarding of major institutions and maturation of the industry. We are building the foundational risk infrastructure layer that the next wave of users, both institutional and retail, will look to leverage."
The founding team behind Cork brings a blend of deep domain expertise from traditional finance coupled with advanced blockchain technology backgrounds. Their objective is to transform previously implicit financial risks into transparent, tradable, onchain entities for the first time, effectively bringing risk markets fully within the blockchain ecosystem while leveraging and extending existing financial system processes.
William Scheinman, Partner at Road Capital, highlighted the challenge Cork addresses: "The onchain economy is poised for secular growth via tokenization, but few quality teams are thinking about second-order effects. Assets will be associated with tokens, which can diverge from their reference due to liquidity mismatches, information asymmetries, solvency crises, and other factors. Past solutions never got the timing, incentives, nor protocol components right to solve the problem. We are excited for the Cork team to provide the workable one. Cork is among the most unique DeFi experiments in core primitives out there." Similarly, other investors including Julien Bouteloup of Stake Capital Group, Jake O. from BitGo, and Dr. Nagendra Bharatula of G-20 Group expressed strong support and outlooks, emphasizing Cork's role in improving institutional access, market structure, and risk transparency within crypto finance.
Looking ahead, Cork intends to launch its initial risk markets into production, broaden collaboration with vault and asset issuers, and foster pathways for regulated products to meet accelerating institutional adoption. Interested parties can track Cork's development through their official channels.
About Cork
Cork has developed a programmable risk framework aimed at enhancing tokenized risk management for onchain assets including vault tokens, yield-bearing stablecoins, liquid (re)staking tokens, and RWAs. By enabling asset issuers and managers to establish custom swap markets, Cork improves redemption liquidity and risk transparency while increasing confidence in onchain financial products. Its backing by prominent venture groups underscores its significance in advancing risk infrastructure necessary for institutional scale capital flow into onchain credit markets.