CPOOLUSD
CPOOL / United States dollar
crypto

Clearpool is a dynamic, decentralized capital markets ecosystem that provides uncollateralized liquidity to insitutions. Clearpool is unique among decentralized unsecured lending protocols because it offers single borrower pools that are of continuous duration and have dynamic interest rates. In order to access Clearpool's liquidity interested institutional borrowers must first be KYC/AML'd by a Clearpool governance approved digital asset custodian (i.e., Hex Trust) and stake CPOOL tokens (currently 100,000, liable to change through governance). The prospective borrower then needs to apply to be whitelisted by the Clearpool community (CPOOL token holders) through a vote. Once approved, the borrower has its own liquidity pool that is of continuous duration, and each pool has a dynamic interest rate that changes based on the amount of total pool liquidity the borrower is using, this mechanism is the same for every pool. Whitelisted projects can be persmissionlessly viewed and funded by liquidity providers, who supply USDC to a pool of choice in the Clearpool app. Although liquidity providers (LPs) have counter-party risk, they can manage, hedge, strip (seperate underlying and yield), redeem (given adequate pool liquidity) and trade (secondary market) it using tokenized credit, cpTokens, which they receive in return for funding a pool. These pool specific LP tokens represent liquidity supplied and risk, and accrue interest on every block. Each pool also has its own recovery pool, the recovery pool accumulates a percentage of interest from each block and can be accessed in the case of a default. There are other accessories as well, such as the governance-approved, fixed duration, thematic pools consisting of multiple borrower liquidity pools. Thematic pools allow LPs to diversify as the protocol algorithmically distributes liquidity to the respective borrowers and rebalances periodically per governance mandate. Thematic pools, like single borrower pools, also return cpTokens except these cpTokens represent the blended risk exposure of all the included borrower pools. Another pertinent feature is the option for borrowers to display on-chain credit risk metrics using partner X-Margin's zero-knowledge technology. Since most of the early borrowers are crypto hedge funds and market makers, a given portfolio's risk metrics will be computed using equity, balance, margin usage, maximum loss (SPAN or VaR calculations), aggregate absolute delta, and gamma, all while preserving the privacy of positions, trades, and any other sensitive information. The default process starts if a pool has more than a 95% utilization, the pool enters a 72 hour warning period whereby the borrower must reduce its utilization ratio below the 95% threshold for the pool to remain active. If a borrower fails to do this the pool goes into default and enters a recovery phase. An auction will take place and participants (individuals, distressed debt funds, debt recovery companies, etc.) will be allowed to bid for the cpTokens from the holders. The winning bidder will receive proceeds from the recovery fund and be able to pursue the borrower through legal avenues such as litigation to recover funds.