Risk management of crypto bond market

Credit risk

The biggest risk faced by the bond market is credit risk, which means that the debtor may not be able to meet its repayment obligations. The reason for the credit risk may be that the debtor is unable to repay; in addition, because of the huge fluctuations in the price of cryptocurrency, the debtor's willingness to repay decreases when the value of the pledged cryptocurrency drops sharply. In order to reduce credit risk, we require the debtor to over-collateralized the cryptocurrency and to supplement the collateral when the value of the cryptocurrency falls. In extreme cases, the liquidator will promptly dispose of the collateral.

Liquidity risk

Liquidity risk is one of the core risks in the field of cryptocurrency. Liquidity risk refers to the risk that the cryptocurrency cannot be sold at a price close to the market price. The liquidator will face this problem when disposing of the collateral. ForTube will set different liquidation service fees according to different pledged assets and attract more liquidators to participate in the system through economic incentives.

Operational risks

Operational risks may come from system failures and hacker attacks. For this reason, ForTube will cooperate with world-renowned system security audit institutions to conduct code audits to reduce this risk to a minimum.