DeFi Magic, Credit Default Swaps Converge in Shadow Lending (1)

Credit default swaps are hard enough to figure out. Shadow lenders and their repackaging of cash flows from loans into securities come with their own complexities. And cryptocurrencies, well, they can be as mind-bending as anything financial alchemists have ever dreamed up.

A new product combines all three into one.

It’s from fintech company Percent Technologies and Anzen, a new player in the corner of crypto known as decentralized finance, or DeFi. The idea is to use capital that crypto enthusiasts have stashed into stablecoins to offer investors in Percent’s high-yield securitizations protection from a default.

It’s not an ...