Solving the Decentralized Credit Problem

Enabling counterparties to under-collateralize obligations without sacrificing trustlessness, openness, or anonymity

Andrew Young
Sep 20, 2018 · 11 min read

Why Credit Matters

“Over the last 500 years, the idea of progress convinced people to put more and more trust in the future. This trust created credit; credit brought real economic growth; and growth strengthened the trust in the future and opened the way for more credit.” — Yuval Noah Harrari

Image pulled from “Sapiens”

Problems with the Current Credit System

Influenced by the BP death spiral graph

Credit on a Public Blockchain

Why Credit is Hard on a Public Blockchain

Current Solutions to Public Blockchain Credit

Screenshot of Bloqboard, the leading dharma relayer.
Bloom’s Peer-to-Peer Credit Staking

Background on CDx

Introducing Rehypothecation

Very simplistic application of rehypothecation by extending the prior example

Rehypothecation Risks

Mitigating Tail Risk through Token Holder Reinsurance

Looking Ahead


CDx Project

Building essential infrastructure for a decentralized financial system. Tokenized credit default swaps on Ethereum.

Thanks to Jake MacDonnell, Julian Wilson, and Jake Hannah.

Andrew Young

Written by

Project Lead @ SportX.bet

CDx Project

Building essential infrastructure for a decentralized financial system. Tokenized credit default swaps on Ethereum.