Decentralized Lending Protocol Clearpool to Start Institutional Borrowing Platform
Clearpool Prime will allow institutional borrowers to create permissioned borrowing pools with their own loan terms.
Institutional borrowers, after going through know-your-customer checks, will be able to create so-called permissioned borrowing pools on Clearpool Prime with their own set of loan terms such as size, duration and interest rate. They’ll also be able to invite lenders to the pool.
Clearpool is a blockchain-based credit marketplace that connects borrowers to lenders with hosting borrowing pools. Lenders, when they provide liquidity to a pool, receive so-called cpTokens that are specific to the pool in return. Those who hold the protocol’s governance token, CPOOL, can participate in voting and stake their tokens to earn rewards. So far, some $350 million of stablecoin loans have originated on Clearpool on the Ethereum and Polygon blockchains, per data on Clearpool’s loan dashboard.
Clearpool’s new platform comes as DeFi protocols aim to attract established institutional investors with more sophisticated products to ramp up lending after a disastrous past year. As the crypto market crashed and multiple crypto trading firms who were large borrowers blew up, centralized lenders such as CoinDesk sister company Genesis and Celsius Network encountered liquidity problems and several decentralized lending protocols left with defaults and bad debt.
“Prime addresses many of the problems that led to systemic risk in the CeFi [centralized finance] lending market in 2022, and we are confident that it will be a valuable addition to Clearpool and the institutional DeFi ecosystem,” the post said.
Clearpool also announced plans to expand the assets supported for borrowing in its permissionless borrowing pools to all ERC-20 and wrapped ERC-20 tokens such as wrapped bitcoin (wBTC) and wrapped ether (wETH). The first such pool will open in the coming months, according to the post.
The protocol will add permissionless term pools, where borrowers will be able to take out loans with fixed maturity periods. Lenders can lock up their cpTokens to earn additional yield. Clearpool will also issue designated tokens for the term pools called tpTokens that holders can trade on secondary markets.
The protocol unveiled a product called Exchange Traded Pools (ETP), “a first in DeFi,” per the blog post. These will allow lenders “to diversify liquidity across multiple borrower pools in a single transaction, mitigating counterparty risk while maintaining yield opportunities."
CPOOL has gained 8% in the past 24 hours, outperforming BTC (-0.15%) and the CoinDesk Market Index (+0.16%).
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.