Clearpool Brings An Ecosystem That Will Change DeFi Forever

Bringing DeFi and TradFi together

por Valeria Valera en Dec 2, 2021

This post is also available in: Español (Spanish)

Origin

Founded by Robert Alcorn, Alessio Quaglini and later Jakob Kronbichler, Clearpool is a world-class platform brought to life by the growing need for access to liquidity. The platform also enjoys stellar custody and compliance services.

The senior leadership team consists of highly experienced professionals from traditional finance, fintech, consumer startups, and blockchain technology. Robert Alcorn, CEO, has more than 20 years of business experience.

What does ClearPool offer?

Such services include identity verification and KYC from Asia’s leading digital asset custodian, Hex Trust.

Clearpool’s LP tokens, called cpTokens, are the building blocks of a tokenized credit system that will provide Clearpool’s LPs with hedging and risk management capabilities.

As more institutions begin to realize the benefits that decentralized finance can bring to their organizations, Clearpool will provide the new architecture to facilitate flows between the traditional $ 120 trillion capital markets and the burgeoning DeFi ecosystem.

Liquidity providers in Clearpool can earn attractive returns, with enhanced group interest rates for additional LP rewards paid in CPOOL, Clearpool’s government and utility token.

Clearpool is backed by high-caliber investors

The capital markets platform also brings to life several exciting new features for decentralized finance (DeFi).

According to co-founder Robert Alcorn, these features also “[…] provide Lenders (LPs) with sophisticated hedging and risk management solutions to manage counterparty risk.”

Solving problems

Crypto institutions don’t have the same access to financial services as their traditional peers, making it difficult to raise capital. This forces them to look for alternative sources of capital, mainly in DeFi and CeFi.

DeFi protocols require collateral, and overcollateralisation has become a major pain point for institutional borrowers in this space.

CeFi platforms are less reliant on collateral by reintroducing counterparty risk, but provide little risk management capability for LPs.

A change in the DeFi formula

Clearpool is focused on marrying DeFi’s liquidity with traditional finance. DeFi enthusiasts looking to access liquidity face many challenges. The DeFi space is still pretty underdeveloped compared to its traditional counterpart.

For example, there are no reliable credit scores, risk profiles, etc. Clearpool is focused on developing loans in the DeFi space to be comparable to traditional finance.

With Clearpool, lenders will have access to important details such as borrower creditworthiness, risk profiles.

How does it work?

Clearpool borrowers are whitelisted through a governance process by making a proposal to the Clearpool community – CPOOL token holders.

Borrowers must have completed a KYC process with a Clearpool government accepted authorized custodian and be staking a CPOOL amount to be eligible to bid.

The community assesses the robustness of a borrower’s proposal and then votes to reach a consensus decision on whitelisting.

Once a borrower has been whitelisted, they can create and launch a liquidity pool and attract liquidity directly from the DeFi ecosystem.

Interest rates

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Smart contracts that run on the Ethereum blockchain are continuous and borrower-specific, meaning that there is only one borrower for each group.

Pool interest rates are dynamic, rising and falling based on the pool’s utilization rate, the amount of liquidity the borrower is currently using.

Continuous funds and this dynamic interest rate mechanism will always lead to an equilibrium level of interest rate and fund size for each borrower, eliminating the requirement for regular interest payments and repayment of principal.

By introducing these innovative principles, Clearpool has created the world’s first dynamic credit market for unsecured liquidity.

Anyone can be an LP in Clearpool. When connected to the Clearpool app via web3, LPs can view information about whitelisted borrowers and details for each group.

Selecting a pool and providing liquidity is a straightforward process and in doing so the liquidity provider will receive LP tokens called cpTokens in return.

cpTokens

Clearpool is based on the Ethereum blockchain. The team is currently evaluating other blockchains and layer 2 solutions, and will make an announcement soon.

The cpTokens represent the amount of liquidity that has been supplied to a group, accumulate the interest rate of the group in each block and represent the risk profile of the borrower.

CpTokens can be redeemed, are subject to available liquidity and can also be traded on a secondary market, where LPs can access an additional source of liquidity and manage risk.

Holders of cpTokens will earn additional LP incentive rewards paid on CPOOL, making Clearpool one of the most attractive places to lend on DeFi.

Token Distribution

What does ClearPool offers to retail investors?

Clearpool allows retail investors to participate in some of the types of investment opportunities that are typically only available at TradFi to institutions or HNWIs.

Clearpool’s institutional borrowers, such as hedge funds and highly successful trading companies, make huge profits and therefore can pay higher interest rates for unsecured liquidity.

Therefore, LPs in Clearpool can participate in the success of these companies’ strategies by granting them loans and receiving the highest interest rates.

The additional bonus rewards paid in the native CPOOL token will push the overall APYs to very attractive levels, especially for holders and long-term bettors.

This will make Clearpool one of DeFi’s most attractive locations for lenders and investors.

Conclusion

Interest in CPOOL has already reached incredible levels. With thousands of users wanting to get involved in public sale, the team is working hard to make the token launch as open and accessible as possible. All of this will be announced soon.

Immediately after the IDO, the pre-staking program will be available on various platforms, this will provide CPOOL holders with incredible opportunities to increase their holdings as the mainnet launch approaches.