Cora is a decentralized money market protocol with a novel design, that allows borrowers to get loans without the risk of being liquidated.

Introduction

The crypto lending market peaked at around $45 Billion in 2021. This is huge for an emerging novel sector. Although there’s great potential in on-chain money markets, flaws like abrupt liquidations, capital inefficiency, and risks associated with liquidity, cause market and interest rates to hold them back from achieving their true potential.

Focusing on these issues, we leverage our experience with top DeFi option protocols to build a new primitive, which makes crypto lending more efficient, optimised, and free from abrupt liquidations. *sighs in relief*

What is Cora?

Cora is a decentralized lending protocol that allows users to borrow stablecoins for a fixed period of time without the risk of being liquidated. Borrowers only pay a one time borrowing fee and they can use any supported token as collateral.

Liquidity providers can provide any supported stablecoin to the protocol and earn constant yield without any management.

Why Cora?

Traditional lending protocols like AAVE and Compound put all the risk on the borrowing side. Borrowers are not only exposed to external market conditions and abrupt price decreases, but also to threats like liquidation thresholds that have the intention to incentivise actors like liquidators.

This dynamic is a disadvantage for the borrower, it fully exposes them, which we believe is wrong.

Entering Cora.Money

How Cora Works

Cora eliminates the full risk from borrowers and offers a clear picture of their position. They know in advance the amount they need to repay (including the borrowing fee), their downside, and their potential upside, which is unlimited.

“Lenders” or Liquidity Providers take the risk of the loan while retaining the management over said risk. The Cora protocol helps LPs avoid losses by defining risk parameters like LTV and selecting the right pricing model. These models are fully decentralized and are based on Option pricing theory.

Picture both parties’ positions as the following:

What makes Cora unique

Capital Efficiency

Liquidity providers only deposit stablecoins in a lending pool.

The first version of the Cora protocol will support one pool of capital per collateral type. However, we are working on a multi-collateral design, which means that a single pool of liquidity will be able to offer loans and accept multiple collaterals.

We expect this to be a huge advantage, since it will maximize capital efficiency.

Our plans include the whole ETH family and its derivatives like stETH, cbETH, RETH, ERC-4626s using ETH and LP tokens, for instance stETH-ETH.

Immutable

Our smart contracts are non-upgradeable, which means the rules are written in code, and code is law.

Permissionless

Anybody will be able to create their own lending pools with any of their desired pricing models, initially this will be done through proposals to the Cora DAO which will group the community interests.

Modular pricing models

A lending pool can have any price model. This has immense implications, anybody can build endless products using the Cora protocol as base layer,such as interest rate swaps, structured products, and more.

Decentralized pricing models

Our decentralized price models allow anyone to participate in the management and maintenance of the price model. This will include mechanisms for dispute and resolution using UMA protocol but also incentives for actors that help to support the price model mechanism.

Community owned

The Cora protocol is a public good. The community will drive the development and vision of the Cora protocol.

The protocol design includes native economic mechanisms to incentivise actors to participate in the growth of the Cora protocol.

Ways you can get involved

If you are a financial engineer, risk manager or mere DeFi aficionado and want to build on top of Cora or contribute in any manner, join us now to help drive Cora to the infinity and beyond..

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