FinCypher was born to define a safer way for repackaging and distributing DeFi loans and other risky assets targeting to democratize credit risk distribution.

The dark side of the DeFi space

Although decentralized finance (DeFi) is driving the crypto market right now, it has many inner issues. DeFi still faces risks from different dimensions:

First, it lacks accountability. There is no authority that will take responsibility when something goes wrong. This is called decentralized, however, it’s not good if no one is accountable for the operation of the systems. That means your token holding can go to heaven or to hell.

Secondly, cyber-risk is always the problem. In September 2020, hackers attacked KuCoin Exchange and transferred most of the stolen assets to DEXs such as Balancer, Akropolis, Opyn, etc. This and the prediction that DeFi hacks will increase lead to the need for high-security standards to distribute crypto assets.

Last but not least, interest rates are very volatile. Alpha Finance Lab, Curve, Yearn Finance, or Compound - all are great projects but the yields are highly volatile and risky, which creates a significant barrier of entry for risk-averse investors.

We cannot deny that DeFi is the future. But we are still far from mass adoption because of those issues.

Why do we need FinCypher’s CDOs?

CDO or Collateralized Debt Obligation can apply to create another layer of opportunities to mitigate the above problems through effective allocation of the risk.

That’s why FinCypher was born. Our new structured CDOs are designed to enable the pooling of a large number of risky assets, such as DeFi loans, betting results, mainstream receivables, and the application of trenching within a contract to issue Fyncypher tokenized instruments using those underlings as collateral.

The FinCypher protocol is a smart contract-based marketplace, which fully abstracts the complexity of the issuance and trade of this type of complex derivatives. The whole system is fully decentralized and very developer-friendly.

FinCypher Token: The journey has just begun

FinCypher token is designed to be the system’s governance token, empowering token holders to vote on updates for the platform. Combining governance mechanisms and incentivizing holders, it will serve as a means to align the different stakeholders in the system.

OPIUM, one of the first CDO projects, has gotten attention when listing on Uniswap, 1INCH, and SushiSwap. With the potential of CDO markets, the need for FinCypher tokens will rapidly increase. The more utilities the token has, the higher price it is.