Guaranteed Protection

Blockchain-powered Default Compensation Receipt™ (DCR) securities pay full market-based compensation to holders following a qualifying credit event.

Thus, DCR securities guarantee the market value of every referenced bond.

Default-Compensating Securities

DelphX® participants can anonymously structure blockchain-powered DCR securities that precisely meet their protection and/or speculation requirements for any of more than 1 million eligible reference issues.

All DCR securities:

  • Are competitively negotiated and originated within the all-to-all DelphX market
  • Specify a negotiated fixed spread and tenor
  • Continually guarantee the market value of the referenced credit issue
  • Are transparently administered in the blockchain-powered distributed ledger integrated within DelphX
  • Are immediately eligible upon origination for secondary trading on DelphX
  • Are continuously benchmark-priced through validated MAVn® pricing forecasts
  • Facilitate liquid basis trading of the DCR and its referenced cash bond.

 

Continuous Mark-to-Market Collateralization

For optimal security, all DCR securities:

  • Are collateralized by cash, cash-equivalent assets and guaranteed investment contracts issued by highly-rated insurers
  • Automatically adjust daily in percentage of collateralization based upon the current market pricing of DCR protection for the referenced issue
  • Contractually increase to full collateralization upon the report of a credit event involving the referenced issue.

 

Market-Based Compensation

When a credit event involving a referenced issue occurs, the compensation payable on all DCRs referencing the subject issue is determined by a single-price settlement auction of all available supply of that issue on DelphX. The clearing-price determined by that auction is then subtracted from the security’s par value to determine the compensation payable on all DCRs referencing that security.

 

Single-Price Settlement Auction

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A Better Bond Market

DelphX_Whitepaper_thumb.jpg Default risk is too concentrated. The market is nontransparent. Too few issues can be protected. DelphX addresses these problems, providing guaranteed credit protection, deeper market liquidity and enhanced investor yields.

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