Hyperithm Backs 'Cork Protocol' in $5.5M Seed Round to Bolster On-Chain Risk Management
Virtual asset firm Hyperithm has made a seed investment in Cork Protocol, a platform specializing in on-chain risk management. The investment is part of a larger $5.5 million (approximately 7.7 billion KRW) seed funding round co-led by crypto accelerator a16z CSX and Road Capital.
The round also attracted a coalition of prominent global investors and legal firms, including BitGo Ventures, 432 Ventures, and Cooley.
Hyperithm’s investment decision is driven by the anticipation of growing demand for risk management solutions within the maturing Decentralized Finance (DeFi) sector. Specifically, the firm points to the increasing reliance on "pegged assets"—such as stablecoins and Liquid Staking Tokens (LSTs)—which are designed to maintain a 1:1 value with specific assets. As these markets grow, so does the critical need to manage the risks associated with price decoupling (de-pegging).
Unlike traditional DeFi insurance models that simply offer coverage, Cork Protocol introduces a structured finance approach by tokenizing risk itself. This mechanism allows market participants to buy and sell risk freely based on market conditions. The protocol addresses structural dangers, such as sudden collateral depreciation due to market crashes or smart contract vulnerabilities, by providing infrastructure where users can directly trade and hedge against these price volatility risks.
By establishing a standard for tokenizing risk, Cork Protocol aims to solve the industry-wide challenge of pricing risk accurately. The platform utilizes algorithms based on market price data to automate payouts, ensuring both transparency and speed.
"As the markets for stablecoins, Real World Assets (RWAs), and LSTs expand, we foresee a surge in institutional demand for managing underlying pegging risks," said Lee Won-jun, CEO of Hyperithm. "We decided to invest because we expect Cork Protocol to become essential infrastructure that allows these risks to be transparently priced and traded on-chain."
Cork Protocol plans to utilize the fresh capital to enhance platform security and expand its range of supported assets, with the ultimate goal of accelerating institutional entry into the DeFi market.
Norbert Gehrke
