Siprifi Structured Credit Protocol

Siprifi treats NO tokens from prediction markets as valuable assets instead of keeping capital locked until the event resolves. These tokens can be used as collateral to generate new structured contracts, enabling on-chain credit markets and efficient risk transfer.

NO tokens used as collateral to create structured positions.

Using these NO tokens, Siprifi creates Credit Default Swap (CDS)-like instruments, where only YES tokens are traded to represent protection buyers. Binary bets are transformed into structured positions that efficiently manage risk through a deterministic settlement waterfall.

YES tokens represent protection buyers in CDS-like contracts.

Siprifi applies Loan-to-Value (LTV) and Effective Borrowing Power (EBP) formulas to determine the risk profile of positions based on correlation and capital concentration:

V_C = Σ (C_i * P_i)
EBP = max(0, BBP - BASB)

Premiums paid by YES token buyers generate yield for protection tranches:

Senior & Junior tranches in the Siprifi protection waterfall.

- Senior Tranche: Collateralized with strong assets such as ETH to provide final backstop.
- Junior Tranche: Uses sipUSD instead of ETH, representing the loss-absorbing fraction adjusted for the risk of NO tokens and tied to the protocol's Net Asset Value (NAV).

sipUSD is a non-redeemable, floating-NAV equity unit representing a proportional claim on the protocol’s total loss-absorbing capacity. It functions as the residual equity layer in the protection waterfall, absorbing losses that exceed the Junior tranche, and increases in value when NO token positions expire safely.