Clearpool is a decentralized capital markets ecosystem where institutions are able to access uncollateralized liquidity.
The General Manager of Altcoin Buzz, Anindya (Ani) Baidya, anchored the Clearpool AMA session on our Telegram channel with Robert Alcorn, the CEO of Clearpool.
Below is a recap of the AMA session with Robert Alcorn to understand what the ecosystem is up to. The AMA is also in three segments: introduction, deep dive, and community questions and answers.
Segment 1: Introduction to Clearpool
Q – To start with, tell us about your company. How was the concept of Clearpool Finance created?
Sure, so Clearpool started earlier in 2021 by myself and Alessio Quaglini who is the CEO of Hex Trust. We are ex-colleagues from our days working in TradFi in a bank. Alessio and I wanted to create a solution to the problem of over-collateralization in DeFi borrowing. It was a problem that he was well aware of having listened to some of his clients at Hex and a network of industry contacts. So on the back of this, we came up with the idea for Clearpool. My background is in traditional capital markets, fixed income, liquidity, and collateral trading, as well as being involved in crypto since 2015, so together we have the perfect blend of expertise and experience.
Q – Tell us a bit about your team. Where is the team based out of?
We have a lot of guys in Asia and our tech team is mainly in Russia. In Hong Kong, we have Jakob who is our CCO and heads up our BD efforts. Also in HK is Sam our CMO, Vadim our Product Owner, and Varinder our Ops Manager. In Singapore, we have Jeremiah who is also focused on BD. In Moscow is Pavel our CTO, he is joined by a great team of devs, very experienced having worked on multiple blockchain projects together previously, and also winners of multiple ETH hackathons! I am the odd one out, I am based in Dubai.
Segment 2: Deep Dive
About the Ecosystem
Q – Clearpool is a decentralized capital markets ecosystem. This question has two parts. Firstly, can you tell us how a traditional capital market works? And secondly, how will its decentralized counterparts work?
In traditional capital markets, institutions raise capital by issuing bonds. They appoint one or several banks to be the managers of the sale of these bonds to investors. Once the initial sale happens, the bonds can then trade in a secondary market. All of this is largely only available to large financial institutions, and due to large minimum ticket sizes, it’s generally out of reach for most other investors even if they can access it.
On Clearpool, institutions can open single-borrower liquidity pools, which anyone in the DeFi ecosystem can fund. This means that we as retail investors get the same opportunity to earn yield as larger institutional investors. The borrower also has fewer costs and gets a broader level of diversification in terms of funding.
The borrowers also benefit as on Clearpool, liquidity pools are dynamic in both size and in terms of the amount of interest that is paid. Essentially, the more liquidity the borrower utilizes from the pool, the higher the interest they pay. This rewards lenders as risk increases, the way it should be.
As a lender the opportunities on Clearpool are made even more attractive through additional rewards that are paid to LPs in the native CPOOL token, taking total pool APYs to industry high levels. Clearpool will be one of the most attractive places to lend in DeFi.
Possible Advantage to $CPOOL Token owners
CPOOL token holders benefit from all of this, as borrowers have to be staking CPOOL in order to open a pool, and lenders can earn higher rewards when they are also staking and locking up tokens. This creates high demand. On top of that, Clearpool will use protocol revenue to buyback CPOOL in the open market in order to perpetually sustain reward pools. High utility and constant/growing demand, that is what you want from a governance token.
So by leveraging the benefits of blockchain and decentralization, both lenders and borrowers gain huge benefits, and at the same time, we solve the problem of over-collateralization that I mentioned at the beginning.
By the way, the size of the traditional capital market is about $130 trillion. Clearpool will be the bridge between that and the DeFi market.
Q – Let’s say I am a company X. My Token is called X-Token. I have already raised funds before. Out of my 100% X-Tokens, this is the split Team 25%, Marketing 15%, Investors 30%, Community 30%. Now I want to borrow money. So do I need to put this 25% of my tokens inside the pool to get a loan in say USDT? How does the collateral-free happen? (This is from the perspective of a Blockchain Industry player).
There is no requirement for collateral. Clearpool is unsecured lending. On Clearpool company X would make a proposal to the CPOOL community to open a pool on Clearpool. The CPOOL community will vote and reach a consensus on if company X can open a pool. If the community votes yes, company X pool will be live on Clearpool and can be funded by anyone. When you supply liquidity to that pool as an LP, you will receive cpTokens to your wallet in return.
Tokens represent the amount of liquidity that you have supplied, they accrue the interest for that pool, and they also represent the credit profile of company X. LPs will be able to see a real-time risk score for company X based on its interactions with both CEX and DEX/DeFi trading venues, helping the LPs to make decisions on when to lend/redeem liquidity.
Q – So the borrower does not have to put any collateral. Thus the onus is more on the community to judge the validity of the requests, this basically means an excellent voting platform and an absolute spread of the cPOOL Tokens. How will you achieve the same?
In the beginning, the Clearpool core team will manage the process, before it is later delegated to the community. This will allow some more time to allow for a wider distribution of CPOOL. However, once the process becomes fully decentralized voting power will depend on the amount of CPOOL you are staking in relation to how much you are lending, leveling the playing field. The voting power we achieve through this mechanism also dictates what level of additional CPOOL rewards you can achieve through lending. It’s a beautiful governance mechanism and we will be announcing full details of it soon. That’s all I can say on this staking/governance mechanism for now but standby for more details.
Q – Now from the lender’s perspective, what are the metrics a lender will review before he makes a decision (Real-time APYs, pool risk)? How do you enable lenders to make intelligent decisions?
Clearpool has partnered with X-Margin who will provide real-time credit metrics for each borrower. As mentioned earlier, these metrics are based on the borrowers’ interactions on CEX and DEX/DeFi venues. X-Margin uses zero-knowledge technology to achieve this, so the borrowers’ privacy is preserved. The result is that lenders get to see exactly how much risk the borrower is taking at any point in time.
The risk/reward for each pool is based purely on market supply/demand. Each pool has the same interest rate mechanism, a dynamic mechanism that increases the interest rate based on the borrowers’ utilization. This will ensure that each pool reaches an equilibrium state in terms of interest rate and pool size. Higher profile/more reputable/less risky borrowers will pay less for more liquidity and vice versa.
Q – Your mainnet is launching soon. Tell us more. How much liquidity and how many pools will you start with?
We have announced some early borrowers already – Amber, Wintermute, Folkvang, Nibbio, FBG, Auros and we will be announcing more soon.
Participation on our testnet has been amazing with almost 9000 testers so far, so we are very optimistic for the mainnet launch. We also have some institutional lenders lined up, so it should be very good. We aim to scale fast and that is why we focus a lot on BD.
Q – How can our community get more involved with Clearpool immediately (Ambassador Program, Bug Bounty Program, etc)?
Indeed, we have both a bug bounty and ambassador programs ongoing right now! More details on our medium page.
Segment 3: Community Questions and Answers
From this segment, the five best questions shared $500 in $CPOOL. One of these questions is as follows:
Q.Twitter – I read that Auros, with whom you’ve recently partnered, would like to borrow $20 million from Clearpool and help grow its product mix and loan alternatives for everyone. Can you tell us more about the importance of this partnership for the Clearpool ecosystem?
Auros and all of the other borrowers that we have so far announced, and all of the borrowers that are yet to be announced, are all equally important to the Clearpool ecosystem! The more borrowers there are on Clearpool, the more demand will be created for CPOOL, as borrowers will have to stake CPOOL before they can launch their pool.
Also, join us on Telegram to receive free trading signals.
Find out more about the blockchain and crypto space on the Altcoin Buzz YouTube channel.