Clearpool Whitepaper 2.1 Release
On Tuesday, November 2nd, Robert Alcorn, CEO and Co-Founder of Clearpool, announced the publication of Clearpool’s Whitepaper.
The Clearpool Whitepaper explains the problem digital asset institutions face in DeFi lending, most prominent — over-collateralization and the risk of liquidation — while also proposing how counterparty risks (present with unsecured liquidity) can be mitigated via tokenized credit, pool diversification, and the introduction of a ‘decentralized capital markets ecosystem.’
Alcorn stated, “Clearpool has been working tirelessly on the whitepaper, and we are excited to bring the details of our decentralized capital markets ecosystem to our community and contribute the next evolution of possibility in DeFi. The effort involved many late nights, but now we are confident in the mechanics and incentives required in our protocol and are excited for people to check it out to understand better the nuances and the emergent properties a decentralized capital markets ecosystem will enable. Last week we launched $CPOOL token, and further introducing more details of the protocol was a necessary next step to showcase our plans and highlight the innovations we will bring to the DeFi space.”
Not only has the Clearpool team been adding the final touches to their whitepaper, they also recently launched $CPOOL on KuCoin, Gate.io, AscendEX, and Uniswap. CPOOL is the utility and governance token for the Clearpool protocol. CPOOL holders will vote on the whitelisting of new borrowers, a process that will qualify participants to earn additional CPOOL through an incentive reward scheme.
The whitepaper document further details how liquidity providers (lenders) can benefit from the concept of a ‘single borrower liquidity pool’ to manage risk, increase their returns, and have more control over their DeFi lending activities compared to current options available.
Clearpool introduces single-borrower continuous liquidity pools with a dynamic interest rate mechanism that takes its primary input from the pool’s utilization ratio — the amount of liquidity currently being utilized by the pool’s borrower.
Alcorn commented, “When lenders supply liquidity to a pool, they receive cpTokens. These tokens represent the liquidity supplied to the pool, accrue the pool interest and rewards on every block, and represent the risk profile of the pool’s borrower. cpTokens can be redeemed at any time subject to available liquidity and can be traded in a secondary market, giving LPs optionality in terms of liquidity and risk management. cpTokens are the building blocks for a system of tokenized risk which will allow Clearpool later to introduce further risk management and hedging solutions for lenders.”
Released nearly 13 years to the day of the groundbreaking Bitcoin whitepaper — Satoshi released Bitcoin: ‘A Peer-to-Peer Electronic Cash System on October 31st, 2008 to be exact — the Clearpool Whitepaper would not exist without the first blockchain that gave birth to what is now a trillion dollar industry in 2021. Hat tip to Satoshi.
Clearpool’s paper also introduces Thematic Liquidity Pools. Thematic Pools can be created through governance and will provide LPs with the option of diversifying liquidity over many different pools based on credit rating.
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Borrowers on Clearpool have to be institutions that can prove their identity and KYC status; this is done through Clearpool governance approved digital asset custodian. They can then make a proposal to be whitelisted by the CPOOL community.
Take a read of the paper to better understand The Clearpool Protocol, specifically:
- Borrower Whitelisting
- Clearpool Liquidity Pools
- Liquidity Utilization
- Interest Rates
- Tokenized Credit & Risk Management
- Thematic Pools
- On-chain Credit Risk Metrics
- Default & Recovery
- Clearpool Proposals and Membership Staking
- Protocol Changes
Clearpool is a decentralized capital markets ecosystem where institutional borrowers can access unsecured liquidity and where liquidity providers can earn attractive risk-adjusted returns.
The first decentralized dynamic marketplace for unsecured liquidity, where supply and demand always ensure each pool reaches a state of equilibrium in terms of size and interest rate.
A paradigm shift in how institutions borrow uncollateralized liquidity is upon us.