Cycles Rebuilds Crypto Credit Post-2022 Liquidity Crunch
The 2022 crypto bear market continues to impact the industry, with unsecured credit conditions still not fully recovered. Cycles has launched Cycles Prime, a decentralized clearing house for institutional crypto trading firms, allowing netting and clearing of payments without collateral. CEO Ethan Buchman noted that unsecured credit has tightened significantly since 2022, requiring more collateral or pre-funding for transactions. The crisis reduced liquidity and led to declines in many tokens and DeFi volumes, with some projects recovering by 2024/2025 while others, like USDC, only recently regained their market cap highs. Buchman advocates for a network-aware approach to clearing to foster sustainable credit markets, emphasizing the importance of risk management and liquidity. Industry figures highlight ongoing liquidity issues, with recent events exposing critical vulnerabilities in the market.
