Introducing Credit Vaults: Unlocking New Borrower Types & Higher Yield Opportunities
Clearpool, a pioneer in DeFi private credit and real-world asset lending, proudly announces its latest breakthrough product — Credit Vaults. With a commitment to migrating private credit on-chain, Clearpool’s Credit Vaults bring a host of benefits, boosting interest rate efficiency for lenders and empowering borrowers with flexibility and control. With Credit Vaults, borrowers have the freedom to set their own terms and attract a new and wider range of lenders. Credit Vaults enable higher lending APRs — increasing lending volume and protocol revenue.
Highlights
✅ Empowering Borrowers with Flexibility: Credit Vaults allow borrowers to set their own parameters, including interest rates, repayment schedules, and KYC requirements, offering them greater control and customization options.
✅ Attracting New Lenders with Increased Interest Rates: By optimizing efficiency, Credit Vaults incentivize lenders with higher interest rates, attracting new participants
✅ Unlocking New Borrower Types and Loan Opportunities: The flexibility of Credit Vaults opens doors for a diverse range of borrower types, paving the way for secured credit products and non-crypto-related firms to join the Clearpool ecosystem.
Why Build This Product?
Clearpool’s original Permissionless Pools revolutionized the private credit DeFi landscape, providing lenders with flexibility and continuous liquidity. The Permissionless Pools have gained significant traction, with $460 million in Total Loans Originated, and currently stand as the most liquid private credit pools in the market. To cater to the growing demand of different borrower types needing more stable liquidity and rates, Clearpool has built Credit Vaults.
What Are Credit Vaults?
Credit Vaults are open-ended single-borrower pools that empower borrowers to set their own parameters, enabling them to customize interest rates, repayment schedules, pool caps, and more. Borrowers can modify these parameters within predefined rules, offering a wide range of repayment options to suit their needs.
How Do They Work?
When a lender contributes funds to a Credit Vault, the funds are directly sent to the borrower’s wallet. In return, the lender receives cpTokens (as with Permissionless Pools), which accrue interest in real-time on every block.
When requesting a withdrawal, lenders lock their cpTokens into the smart contract, and borrowers have until the next repayment schedule to repay the principal plus accrued interest. If a borrower fails to make the repayment in time, a grace period will commence, during which an additional interest rate premium will be applied to the overall pool amount.
Higher Interest Rates for Lenders
Compared to Permissionless Pools, Credit Vaults have 100% utilization of funds, resulting in highly efficient lending pools. In contrast, the Permissionless Pools operate at ~85% utilization due to the idle liquidity requirements. By increasing utilization from 85% to 100%, lenders will experience a 17.6% increase in interest rates due to the optimization of utilization.
Attracting More Borrowers
Credit Vaults grant borrowers the authority to determine their own rates and adjust based on predefined rules and notification periods. For example, trading firms witnessing numerous profitable market opportunities may increase their rates and pool cap to attract additional liquidity. The same principle applies to repayment frequency, as shorter intervals are more appealing to lenders.
New Product, New Chain
The flexibility of Credit Vaults allows for high customization and stable interest rates, opening doors for a wide range of borrower types to enter the Clearpool ecosystem. Additionally, Clearpool will launch Credit Vaults on a new chain, further expanding the multi-chain ecosystem and reach of the protocol.
Stay tuned as Clearpool will soon unveil further details on the first Credit Vaults, with expectations for secured credit products and non-crypto-related firms to establish their presence on the platform. Exciting times are ahead as we anticipate Credit Vaults to bring in a multitude of new borrowers, attract new lenders, and ultimately increase protocol revenue with the higher interest rates and loan volume, contributing to even more CPOOL buybacks!
