Metrics: Measuring the Performance of the Clearpool Protocol
How can you measure the performance of the Clearpool protocol? Should the focus be on Total Value Locked (TVL)? Or is another metric better? It’s a common question and an interesting topic we wanted to shed some light on. In this article, we explain the metrics displayed on the Clearpool app, on third-party analytics platforms and provide insights on how to analyze them.
Total Value Locked
TVL is the acronym for Total Value Locked, a metric which is widely used in the crypto industry to measure the performance of DeFi protocols. TVL can be broadly defined as the total amount of assets locked within a DeFi protocol’s smart contracts. Whilst this is an important performance metric for many DeFi protocols, it is not a particularly valuable barometer when applied to uncollateralized lending protocols like Clearpool.
Metrics on the Clearpool App
Clearpool believes that the analysis of TVL should be done at a level of granularity which provides users with valuable insight into the different metrics which collectively can be considered as TVL. For this reason, Clearpool will be displaying the following metrics on its app:
- Total Liquidity Provided (TLP) — Total amount of USDC liquidity currently provided by lenders to all pools
- Total Interest Earned — Total amount of USDC interest earned collectively by lenders over time
- Total Loans Originated — Total amount of liquidity borrowed collectively by borrowers over time
- Total Protocol Revenue — Total amount of revenue in USDC collected from both permissioned and permissionless pools
- Total Borrowers Stake — Total amount of CPOOL currently staked by borrowers*
- Total CPOOL Staked — Total amount of CPOOL currently staked in Clearpool’s staking contract
Third-party Analytics Platforms
There are several third-party analytics platforms which provide metrics for DeFi protocols; one of these is DeFi Llama. TVL is the main metric they focus on, however, operating in an uncollateralized lending space requires additional metrics to supplement the data provided on their platform.
DeFi Llama calculates Clearpool’s TVL by measuring the amount of USDC that has been deposited to the protocol’s borrower pool smart contracts, which is currently unutilized by the borrowers*.
Whilst this is the correct calculation for TVL, it does not represent the total amount of liquidity that has been deposited by lenders, a metric that would be more valuable to anyone analyzing the growth and performance of uncollateralized lending protocols.
For this reason, Clearpool displays the Total Liquidity Provided (TLP) metric on its app, which includes both the amount of liquidity that is locked in the smart contracts (TVL) and the amount of liquidity which is being utilized (borrowed) by the borrowers. This metric represents the total amount of liquidity that is currently being provided by lenders on the Clearpool protocol.
*Note: DeFi Llama does provide a “checkbox” option to include the borrowed amount in the TVL calculation.
TVL can also include assets that are being staked in a protocol’s smart contracts. Clearpool borrowers have to stake CPOOL for the duration that their pool remains active; however, this staked amount is held within the Clearpool Governor multi-sig wallet and, therefore, would also not be included in any external calculation of TVL.
Clearpool will soon launch its delegated staking mechanism for the CPOOL token. These tokens will be staked within the protocol’s staking smart contracts and therefore may be included in external TVL calculations.
We hope this article has provided some valuable insight on how to use metrics to analyze the growth and performance of the Clearpool protocol.
If you have any questions or want to learn more, feel free to ask in our community’s Telegram and Discord chat.
