What is Carapace Finance? Carapace Finance was born to solve the risk problems of subprime loans and combat the risk of credit default. Currently, we know quite a few Credit Protocol platforms such as Goldfinch, Maple, TrueFi, Credix,… However, Maple encountered problems when FTX went bankrupt and their loans became bad debt.
So how can we limit the risk of default for Credit Protocol platforms? Carapace Finance was born. So how did Carapace Finance solve this problem? Let’s go deeper with me in this article!
What is Carapace Finance?
The Credit Protocol segment with outstanding projects such as Goldfinch, Maple, TrueFi, Credix,… is increasingly operating strongly with a few examples as follows:
- Goldfinch has provided more than $100M in loans to startups in Southeast Asia and Asia.
- Maple Finance has provided more than $1B in loans to companies and corporations in the Crypto market such as Alameda Research, Maven 11, Orthogonal Trading,…
However, when the crypto market continuously broke down, it also spread to Maple Finance. Specifically, Orthogonal Trading borrowed money (USDC and WETH) from Maple Finance and then lent it to Alameda Research, but when Alameda Research collapsed, Orthogonal Trading could not repay this money to Maple Finance.
The risk does not only lie here as the non-TradFi lenders of Goldfinch, Maple, and TrueFi are all relatively complex and difficult to control. Goldfinch lending to startups is also risky because most startups fail after 3 years of development and Goldfinch’s loans are relatively long.
With such risks, Carapace Finance was born.
Carapace Finance’s Operating Mechanism
In essence, Carapace Finance is an AMM but different from trading crypto assets, here Carapace allows trading of different types of risks when participating in Credit Protocol platforms.
Here we will have 3 components participating in 1 transaction:
- Protection Buyer: A person who holds positions in Credit Protocol platforms. However, he did not want to bear the risks from Credit Protocol projects, so he had to buy insurance (premium) for his loan in the Credit Protocol project.
- Protection Seller: A person who will provide a part of their assets as insurance for the Protection Buyer and they will receive the Protection Buyer’s premium. Of course, Protection Sellers must review extremely carefully the loans they want to buy insurance from Protection Buyers.
- Protection Pool: Is the location where buying/selling transactions take place from Buyer and Seller.
Development Roadmap
Currently, Carapace Finance has become an official partner of Goldfinch and will soon launch the first Protection Pool in Q1/2023.
Core Team
Rohit Sabnis: Co Founder
- Rohit has spent more than 5 years working with the Uber platform with positions such as Head of Global Payments Team, Business Development.
- Rohit also worked in research at ANZ bank in New Zealand.
- In addition, Rohit also co-founded Bazinga Box – a company that develops human potential from the ages of 4 to 8 years old.
Besides Rohit Sabnis, there is one more member Ears is also working on developing the Carapace Finance platform but operates anonymously.
Investor
October 21, 2022: Carapace Finance successfully raised $2.5M led by NFX and also had the participation of Tribe Capital,. Ledger Prime, GSR Ventures, Synthetix, Titan Capital and many other investment funds.
Tokenomics
Update…
Exchanges
Update…
Information Channel of Carapace Finance Project
- Website: https://www.carapace.finance/
- Twitter: https://twitter.com/carapacefinance
- Blog: https://www.carapace.finance/blog
- Discord:
Summary
Carapace Finance was born to solve outstanding problems with Credit Protocol platforms, but the solution is still on paper and has not been proven in practice. In addition, Carapace Finance has only announced its relationship with Goldfinch, while other partners in the same industry such as Maple, TrueFi, Credix,… are still left open.
Carapace Finance still has a lot to follow to prove whether it is suitable for the realities of the volatile crypto market or not?