Credit Default Swap on Aave Credit Delegation

OEX-CDS-AAVE-CREDIT-5FEB-0.1CAP

0x68f7b841ecfa2b7fc7840366535c2751b9fec0dd2ebda1913d94445ae1c1027b

SHORT DESCRIPTION

CDS Contract on AAVE Credit Delegation with maturity of 5 February 2021. Contract pays up to 0,1 WBTC and behaves as an insurance for credit delegation.

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Type

CDS

Underlying

Credit Delegation Debt

Oracle

Aave Lending Pool

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0x5dcdf6a17b95c5a9cc008f89893697e7ae1fface

Contract size

0,005

Trigger price

0

Settlement

WBTC

Buyer Margin*

0 WBTC

Seller Margin**

0,1 WBTC

Expiration

5 February 2020 8:00 UTC

Long wins^

debt left * contract size

Short wins^

premium at settlement - any win of long

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^capped by the initial margin

The derivative fee is 2.5% of the profit (only charges to profit makers) and received by derivative author

maximum risk of buyer; *Maximum risk of seller and maximum gain of buyer; cds contract traded with open price with via order book

LONG DESCRIPTION

A credit default swap (CDS) is a financial derivative or contract that allows an investor to "swap" or offset his or her credit risk with that of another investor.

For example, if a lender is worried that a borrower is going to default on a loan, the lender could use a CDS to offset or swap that risk. To swap the risk of default, the lender buys a CDS from another investor who agrees to reimburse the lender in the case the borrower defaults.

CDS requires a premium payment to create the contract, which is like an insurance policy.

A credit default swap is the most common form of credit derivative and may involve municipal bonds, emerging market bonds, mortgage-backed securities or corporate bonds.