CUSP
The open capital network for outcome markets.
CUSP lets anyone create, fund, and clear capital markets for event-driven assets.
Prediction markets now move tens of billions of dollars a year, and credit against their positions has started to appear. The demand is validated. What serves it is not: today's credit applications are closed systems with internally approved markets, proprietary risk parameters, application-specific liquidity, and independent liquidation infrastructure. Every new protocol rebuilds underwriting, market selection, and default management from scratch. The industry still lacks a common system for creating, evaluating, funding, and clearing outcome credit.
CUSP builds that common system: market, risk, clearing, and capital-allocation infrastructure for event-driven assets, and for any short-maturity claim that resolves against a contractual source and pays out after the fact.
Why the gap exists
Every other on-chain asset class grew an open capital market within months of reaching size. Event contracts are years into their run rate and still have only closed, application-specific credit. The reason is not neglect. It is the collateral.
An event position lives between 0 and 1. It does not drift toward its outcome; it jumps there. A contract trading at 70 cents on a court ruling can settle at zero the morning the decision lands, in a single block, while the order book that was supposed to absorb the sale empties out on the same news. The people most eager to borrow against a position are often the ones who know best how it ends. Point a conventional lending market at collateral like this and you do not get a credit market. You get an insolvency machine with extra steps.
The four properties behind that, and the design they force, are in Why event collateral is different.
What CUSP is built from
Three core protocol layers and one capital-allocation layer, each documented on its own page.
CUSP Markets
Permissionless, isolated capital markets for outcome-linked assets. Each market defines its own collateral, parameters, and liquidation route without exposing the network to one shared pool of risk.
CUSP Risk
A shared underwriting standard for event-driven collateral. It publishes an Outcome Risk Object for every supported asset, and every other layer reads from it.
CUSP Clear
Specialist liquidation, settlement, and default-management infrastructure. It selects the cheapest safe unwind path and runs it, from venue execution to descending-price auctions.
CUSP Vaults
Optional curated strategies allocating capital across approved CUSP Markets. Senior capital earns steadier income; junior capital takes first loss and earns the levered residual.
Market types live under CUSP Markets: standard credit lines, settlement advances, and maker facilities.
The one idea underneath it
For collateral that gaps and goes illiquid on the same news, you cannot fix a shortfall after it appears. By the time you react, the position has already settled and the book is gone. So solvency has to be arranged in advance, not recovered later. That single constraint explains every choice CUSP makes:
- Mark collateral at what it would actually sell for, the worst of several prices under stress, never the last print on the screen.
- Take the trade direction from the venue's own record, because public display feeds get it wrong on a large share of activity.
- Reprice credit from current market state at every rollover, instead of reading it off one utilization curve.
- Treat settlement advances as their own market type. A resolved claim carries no price risk and no informed counterparty, so it is priced differently from credit against a live position.
- Cap total credit by first-loss capital at launch, so senior depositors are protected by arithmetic while the track record is still short, and grow only as fast as that record justifies.
Resources
- Whitepaper: CUSP v4.1, the formal treatment: models, bounds, and mechanism analysis.
- Documentation: these pages, a high-level guide to each layer.
- Contact: research@cusp.fi
Disclaimer
This describes protocol design. Nothing here is investment, legal, or tax advice. Market figures are compiled from venue disclosures and public reporting; any forward number cited is a third-party projection, not a CUSP forecast.