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.
Credit Delegation Debt
Aave Lending Pool
5 February 2020 8:00 UTC
debt left * contract size
premium at settlement - any win of long
^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
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.