Well, if you haven’t heard of Clearpool, then now is a good time to understand more about this rising DeFi lending protocol.
The past month hasn’t been kind to the DeFi market with TVL decreasing to $74.47B on 29 June. Starting with LUNA/UST debacle, we witnessed the rippling effect spread across the DeFi market as Celsius, Babel Finance, BlockFi, and many others exposed their vulnerabilities. The DeFi market has been rocked by the big players in the space, however, it also shines the light on protocols that continue to build and deliver sustainable value. One of them is Clearpool, a decentralized lending platform for institutional borrowers.
Despite the turbulent times, Clearpool continues to differentiate itself using these strategies:
#1 Clearpool operates on a blockchain and is written by smart contracts.
Unlike opaque centralized lenders, all transaction activities are recorded on the blockchain and can be easily tracked. The use of smart contracts also ensures that the contracts with various lenders and borrowers are strictly adhered to, based on Clearpool’s focus on credibility and good market practices.
#2 Uncollateralized loan
With uncollateralized loans, Clearpool provides borrowers with maximum capital efficiency. Coupled with the straightforward onboarding process, it is not surprising to see a growth in permissionless borrower pools on Clearpool since launching in March. As of 3rd July, total loan origination has breached $160M!
#3 Clearpool partners with X-Margin, a credit rating agency that uses zero-knowledge technology, cryptography, and confidential computing to conduct credit risk analysis.
Our partner conducts real-time risk monitoring on all our borrowers during the onboarding process before they are approved to open a borrower pool. Even with its latest borrower pool, TPS Capital, which is associated with 3AC that recently filed for bankruptcy, X-Margin has been very responsive to challenges. The borrower was immediately downgraded to a B rating and the borrower pool closed immediately after receiving full repayments(inclusive of interest).
#4 Clearpool is leading TradFi into DeFi by facilitating a permissioned pool between Jane Street and BlockTower Capital.
Jane Street, a Wall Street giant, has entered into a permissioned lending pool with BlockTower Capital using Clearpool, accessing up to $50M of loans. Gaining the trust of one of the largest Wall Street trading firms also paves the way for the subsequent pipeline of TradFi borrowers looking to gain cheaper credit access from a diversified pool of lenders.
#5 Clearpool continues to facilitate healthy lending activities with support from its partner, Hex Trust, which provides institutional-grade security for the protocol’s funds.
Hex Trust, a leading digital asset custodian, partnered with Clearpool to provide institutional-grade custody of the protocol’s treasury, compliance services, and transaction monitoring services. As funds are stored in Hex Trust’s cold wallet, this provides the highest level of security and flexibility to navigate through this bear market.
#6 Full flexibility to lenders and borrowers
After rigorous checks, approved borrowers can open a borrower pool and have the access to a diversified pool of lenders, reducing the risk of wholesale loan withdrawal. They are also given full flexibility in repaying interests and principal amounts. Interest rates are also determined by market demand and supply. At high utilization, interest rates would be higher, vice versa.
Lenders can choose the borrowers that they want to lend to and can also withdraw anytime they want to without any lockup period and no exit fees.
#7 Strong roadmap for token holders and the protocol.
In Q3, native staking is expected to be launched. There will also be a buyback mechanism in place which promises to make $CPOOL a deflationary token, a plus for holders looking at capital gains. Clearpool has also recently announced plans to launch on the Polygon network which would potentially see the protocol recording stronger growth in TVL, interest revenue, and token incentives.
Outlook
With a strong team with years of experience in the debt capital markets, Clearpool has clearly identified the concerns of TradFi firms and offered innovative solutions to address them. The bear market has exposed many firms with bad market practices. Moving forward, there will be greater calls for transparency and security. When the bad actors are weeded out, it is when sustainable protocols like Clearpool demonstrate their leadership in bridging TradFi into DeFi safely.
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Useful Links
Clearpool Whitepaper : https://docs.clearpool.finance/resources/whitepaper
Clearpool Twitter: https://twitter.com/ClearpoolFin
Clearpool Website: https://app.clearpool.finance/
Clearpool’s CEO interview with CryptoVista: https://cryptovista.com/whos-who-in-crypto-robert-alcorn-ceo-and-co-founder-of-clearpool/
Twitter thread by COO and Head of Investment at SinoGlobal: https://twitter.com/ianw888/status/1534307153514795008
AMA takeaways with Hex Trust and Clearpool: https://twitter.com/jinming_n/status/1541423299716333568
