FAQ
Clearpool is a DeFi credit marketplace. In Clearpool, users can lend stablecoins directly to institutions for risk-adjusted earnings. Since its mainnet launch in March 2022, Clearpool transactions have amounted to over $440 million.
Anyone can lend funds in Clearpool. The borrower pools don't need permission, which means you only need a wallet that supports this protocol. Currently, you can lend USDC and USDT for attractive, risk-adjusted earnings. The lending doesn't need lock-up periods or redemption fees, and allows you to make earnings on every block.
In Clearpool, you can directly choose your lending party. Each borrower pool is launched by a single institutional borrower. It allows you to fully understand the counterparty's risk. The interest rates in Clearpool are dynamic and adjusted based on the utilization rate of borrower pools.
Clearpool has partnered with Credora. It uses privacy-preserving Zero Knowledge Proofs (ZKP) to calculate real-time risks for borrowers who launch pools on Clearpool.
In addition to real-time risk monitoring, Credora also provides financial statement analysis and comprehensive due diligence for borrowers. This brings credit ratings from AA to D for each borrower.
The borrower of this product is Fasanara Investments Master Fund. Its credit rating is AA, which is the highest by far.
You may encounter counterparty default and protocol risks. Despite Credora’s extensive risk assessment, there’s always a default risk from borrowers. In such cases, lenders may lose a part (even all) of their investment. Please note that these loans aren’t collateralized, which means that there is no onchain collateral that can be liquidated and available to lenders.
Each borrower pool has an insurance account. It acts as a safety measure designed to further protect lenders in the event of a default. On every block, a governance-approved percentage of the pool’s interest (currently 5%) goes to the insurance account. This means it can be claimed by the pool lender through an auction.
Additionally, similar to any DeFi protocol, Clearpool also has a protocol risk. This means the protocol could be hacked, causing a loss of your funds.
If you can't withdraw funds lent on Clearpool, a possible reason is that the borrower's utilization rate exceeds 99%. This can happen a lot, however, when there are large withdrawals by lenders. In such cases, borrowers have up to 5 days to repay funds to the pool until the utilization rate falls below 85% to avoid a default.
If the borrower fails to repay in 5 days after exceeding the utilization rate of 99%, Clearpool will automatically trigger a default. In the event of a default, an auction will be initiated where bidders on the whitelist can bid on the claim of the debt.
