CDx came to life as the three co-founders were trading crypto assets. We wanted to keep our assets on exchanges to trade, but we were worried about the risk that the exchanges would default on us if they were compromised by hackers, shut down by regulators, etc. Talking to other investors, traders, and market makers confirmed that a liquid market for insuring crypto exchanges and other crypto credit risks would be a valuable addition to the ecosystem.

CDx is an open protocol for creating tokenized credit default swaps that utilizes the Ethereum blockchain as its custodian, clearinghouse, and enforcement mechanism rather than centralized financial intermediaries and the legal system. For the first time, crypto investors can trade the credit risks inherent in the ecosystem in a fully trustless and peer-to-peer environment.

We’re starting with crypto exchanges, but our long-term vision is the tokenization of the $10 trillion traditional CDS market. To achieve this, CDx has built-in compatibility with the Dharma protocol so that anyone can buy a CDx swap on their tokenized debt assets to protect themselves from debtor default.