Register and share your invite link to earn from video plays and referrals.

The Risk Protocol
@TheRiskProtocol
Join Trading Competition: Community: Award Winners @ Arbitrum Founder House & Paris Blockchain Week
Joined June 2024
160 Following    2.6K Followers
Yield tokenization gave DeFi a new market. Risk tokenization gives it the risk infrastructure layer it never built. RiskON and RiskOFF split the risk of the underlying itself. One BTC or ETH in, two fully collateralized tokens out: RiskOFF with a floor on losses and RiskON with ~2x leverage. The split runs on options, not debt, so there are no margin calls, liquidations, or funding rates. RiskON and RiskOFF is just the beginning: the same engine can split risk along other lines too, like volatility, yield, and more.
Show more
Exposure Tokenization Is Already a Billion-Dollar DeFi Primitive DeFi used to tokenize assets. Now, it is doing something even more powerful: Tokenizing each layer of financial exposure embedded within an asset ↴↴↴ --- @pendle_fi currently holds around $1.27B in TVL, with roughly $629K in fees over the past 30 days. A yield-bearing asset can be split into PT + YT, turning principal and future yield into two separate markets. @strata_markets splits a yield strategy into Senior + Junior tranches. With srUSDe, Strata previously stated that the Junior tranche provides around 30% additional risk coverage for Senior, effectively turning risk itself into an exposure that can be priced separately. @roycoprotocol also structures a yield source into Senior + Junior tranches. Junior acts as first-loss capital and receives a risk premium from Senior. In other words, DeFi is beginning to build fully onchain capital structures. @TheRiskProtocol takes this even further: 1 BTC or 1 ETH → 1 RiskOFF + 1 RiskON. Together, the two tokens still represent the value of the underlying, but RiskOFF takes on lower exposure while RiskON can reach roughly 2× exposure outside the strike range under the current design. @covenantFi splits a base asset into Yield Coin + Leverage Coin, one side represents debt/yield exposure, while the other takes leveraged exposure to the underlying. --- 1 Asset → Multiple Exposures → Multiple Tokens → Multiple Markets. DeFi does not need thousands of new assets to keep expanding. It can create thousands of financial products from the assets that already exist. ⤷ RWA brings assets onchain. Exposure Tokenization turns each asset into a financial system.
Show more