Clearpool launches its mainnet on March 23rd, 2022. As a result, we will see institutional unsecured liquidity enter DeFi. Surely, an interesting and unique addition to the DeFi space. Their first launch is on the Ethereum blockchain. Other chains will follow, spearheaded by Polygon. This will open up a bigger market. It also allows the protocol to scale at a faster pace. Furthermore, they offer faster and low-cost options to users.
The DeFi market grew by 47% in 2021. The total value reached $175 billion in September 2021. However, traditional finance or TradFi has a total value of around $100 trillion. It may come as no surprise that bridging the gap between DeFi and TradFi is one of the goals for Clearpool.
— Clearpool (@ClearpoolFin) March 22, 2022
What Is Clearpool?
Clearpool offers a solution for decentralized capital markets. The protocol offers institutions options to borrow money from lenders. What sets them apart is their option to use uncollateralized liquidity. Institutional borrowers need to be whitelisted by Clearpool. Thereafter, they can create and launch liquidity pools. To clarify, these pools are individual and for single borrowers.
Clearpool is opening up options for collateral everywhere. They want to provide all participants with no liquidation risk. On one side they offer a unique gateway to unsecured liquidity inside DeFi. On the other hand, they also offer practical solutions. These are not only for hedging but also cover risk management.
What Clearpool is looking for, is the introduction of institutions and TradFi to DeFi. They have different tools for this than TradFi is accustomed to using.
How Does Clearpool Bring Institutions and TradFi Into DeFi?
The team behind Clearpool has some good ideas to bring Institutions and TradFi into DeFi. For instance, Clearpool has:
- Single-borrower liquidity pools
- Thematic pools
- Tokenized credit solutions
As a result, Clearpool got the attention of high-profile borrowers and lenders. Furthermore, lending opportunities with high yield are now also within reach of retail lenders.
✅ Lend your stablecoins to top-tier institutions
✅ Access the same opportunities as institutional investors
✅ Compounding interest earned on every block
✅ No KYC needed for lending (just use your @MetaMask)
— Clearpool (@ClearpoolFin) March 21, 2022
On the borrowing side we find firms like Wintermute, Amber Group, and Folkvang. They plan to launch these single borrower liquidity pools. These firms are major crypto institutions as market makers and OTC traders. Together, they trade billions of dollars each day on all major crypto exchanges.
Folkvang is planning to borrow at least $10–40 million on the Clearpool platform. Amber Group and Wintermute plan to borrow $25–50 million.
On the other hand, lenders will find that Clearpool is permissionless. As a result, they only need a WEB3 wallet to connect and get access to the protocol. This opens the Clearpool yield options for both:
- Individual lenders
- Institutional lenders
Currently, $100 million is already committed for deployment. This includes crypto and TradFi partners like:
- GBV Capital
- Hex Trust
- Sino Global Capital
Source: Clearpool website
The cpToken is the native token that powers the mainnet. Upon providing liquidity to a pool, lenders receive the cpTokens. These are relevant to each specific pool. Three important functions of the cpTokens are:
- Representing the liquidity amount, supplied to specific pools.
- Accruing yield for these pools. For each block.
- Representing a pool borrowers risk profile.
Depending on the pools’ liquidity, these tokens are redeemable at any time.
The first asset to be lent is USDC on Ethereum. Lenders not only receive USDC interest but also get CPOOL tokens. Clearpool plans to launch on more chains, like Polygon. They will enable stablecoins and other assets.
To sum up, Clearpool puts itself ahead of the competition. They offer a unique borrowing and lending system. Furthermore, they are bridging the gap between DeFi and TradFi. This makes them one of the most engaging platforms in DeFi. Especially for lending stablecoins and good risk-adjusted yields.
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