Tashi Finance & Ledger Works partnership

February 3, 2024

5 min read·Feb 3, 2024

Tashi Finance & Ledger Works partner to re-invent risk management for DeFi lending

Tashi Finance (“Tashi”), a non-custodial liquidity market, is partnering with Ledger Works (“LWorks”) as their strategic risk partner for their Borrow/Lend platform into the Cosmos ecosystem, enabling seamless cross-chain transactions and unlocking the potential of interchain DeFi.

By partnering with LWorks, Tashi will receive comprehensive risk management coverage for each market listed on their platform. At present, these will include evmos (EVMOS), cosmos(ATOM), Wormhole ethereum (WETH), Wormhole bitcoin (WBTC), usdt (USDT) and usdc (USDC).

The Cosmos ecosystem, powered by the Tendermint consensus algorithm, aims to create an Internet of Blockchains, fostering interoperability between various chains. With its innovative Inter-Blockchain Communication (IBC) protocol, Cosmos enables secure and trustless communication among sovereign blockchains, facilitating the transfer of assets and data across different networks.

The integration of an EVM chain within the Cosmos ecosystem brings the solidity and developer-friendly environment of Ethereum to this interoperable framework. It allows developers to leverage existing Ethereum smart contracts and tools while benefiting from Cosmos’ scalability and compatibility with other chains. This integration lays the foundation for the launch of the Tashi protocol on an EVM chain within the Cosmos ecosystem

Tashi within the Cosmos ecosystem brings the benefits of decentralized lending and borrowing to a broader network of users. This platform will provide an avenue for users to deposit their assets as collateral and borrow against them, creating a more inclusive and efficient financial ecosystem.

  • Cross-Chain Borrowing and Lending: With the Cosmos ecosystem’s interoperability, users will be able to borrow and lend assets across different chains seamlessly. This enables the efficient utilization of assets from multiple chains and expands the pool of available liquidity.
  • Enhanced Scalability: The Cosmos ecosystem’s scalability, achieved through its modular architecture and interchain communication capabilities, ensures that Tashi can handle a higher throughput of transactions. This scalability is essential to accommodate the growing demand for DeFi services without congesting a single chain.
  • Lower Transaction Costs: By utilizing an EVM chain within the Cosmos ecosystem, users can benefit from lower transaction costs compared to the Ethereum network. This cost efficiency is crucial for small lenders and borrowers who would otherwise be deterred by high gas fees.
  • Interchain Collateralization: Tashi can support the use of collateral from different chains, enabling users to leverage assets from various ecosystems. This diversification of collateral reduces risk and increases the flexibility of the borrowing and lending process.
  • Interoperable Token Standards: With the EVM compatibility, Tashi can leverage existing Ethereum token standards, such as ERC-20 and ERC-721. This compatibility simplifies the integration of different tokens into the platform and allows for a broader range of assets to be used as collateral.

Launching Tashi into the Cosmos ecosystem on an EVM chain represents a significant step forward in the evolution of decentralized finance. The integration of Cosmos’ interoperability and scalability with the Ethereum developer ecosystem brings forth a new era of interchain DeFi, enabling users to seamlessly borrow and lend assets across multiple chains.

This integration not only enhances the efficiency and accessibility of DeFi services but also promotes collaboration among different blockchain networks. By leveraging the benefits of the Cosmos ecosystem, including cross-chain communication and scalability, Tashi can unlock the full potential of decentralized lending and borrowing, fostering a more inclusive and interconnected financial ecosystem.

Tashi operations will be supported by LWorks’ quantitatively-defined parameter recommendations for collateral factors, borrowing limits, and more. Leveraging deterministic and stochastic models, network-wide simulations, and real-time market surveillance allows Tashi to minimize market challenges.

This enterprise-scale risk management will place Tashi levels above any other protocol within Cosmos ecosystems regarding market surveillance. Moreover, Ledger Works’ suite of solutions will inform optimal lending terms for Tashi’s markets, optimizing total protocol efficiency.

LWorks offers integrated risk management services that combine cyber, operational, and financial risk controls into a unified dashboard with real-time computational models and rules that enable continuous market surveillance for market-wide and decentralized finance (DeFi) protocol-specific risks.

Key features of Ledger Works solutions for Tashi will include:

  • Real-time market surveillance through intuitive dashboards and alerts.
  • Cyber risk monitoring alerts to identify potential exploits and vulnerabilities.
  • Operational risk monitoring alerts to identify protocol issues proactively.
  • Financial risk parameter recommendations, including Collateral Factor, Reserve Factor, and Borrow Cap.
  • Event response support services during extreme market conditions.

LWorks is expanding its machine learning environment to leverage extensive data sets, existing rules, and financial models. This initiative aims to provide faster and more effective risk identification and response mechanisms.

Meanwhile, Ledger Works has over 100 years of combined experience in security, risk management, and big data systems. Their CEO, David Melnick, held a national partner role in Deloitte’s Enterprise Risk Services practice before launching Ledger Works.

Steve Elfanbaum, the chief technical offer (CTO), previously was co-founder and principal at Asynchrony Solutions. At the same time, their chief data scientist, Chintan Mehta, earned a Ph.D. from Princeton University and completed extensive postdoctoral work at Yale University.

Initially collaborating with the team while at Bridgewater Associates, Chintan brings his expertise in deterministic and stochastic modeling to coordinate the engineering and data science efforts at Ledger Works.

Kristine Boulton, a core contributor at Tashi, states:

“As a lending protocol, it is imperative for Tashi to effectively manage risk to protect our users and maintain healthy, active markets. We are thrilled to collaborate with the team at Ledger Works to ensure that our risk strategy enables us to do just that. With their offering of 24/7 market surveillance, expertise in risk management, security, and data analytics, coupled with their professional approach, we are confident that this partnership will propel Tashi and the Evmos ecosystem to even greater heights.”

David Melnick, the CEO of Ledger Works, added:

“The Ledger Works team is excited to collaborate with Tashi on their DeFi Lending Protocol. Their innovation and professionalism align perfectly with our team’s approach to Risk Management. By combining their DeFi experience with our comprehensive Risk Management solution, we can deliver a world-class offering to the market.”

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