“The panic of ‘22 showed that much like in TradFi, liquidity and solvency are intimately bound up with each other,” said Cycles’ Ethan Buckman.
The fallout from the 2022 crypto bear market still reverberates across the industry, with unsecured credit conditions not fully recovered from the panic crash that engulfed lenders like BlockFi, Celsius, Voyager and, ultimately, FTX.
Three years later, privacy-preserving clearing protocol Cycles is attempting to build a foundation for sustainable credit markets to reemerge.
In May, the company launched a pilot version of Cycles Prime, which acts like a decentralized clearing house, enabling crypto trading firms to net and clear outstanding payments without collateral or escrow. The pilot was reserved for institutional crypto trading firms that want to reduce credit usage without central counterparties.
