Clearpool, a decentralized finance (DeFi) protocol, has informed CoinPosters in a statement that it will launch its institutional credit platform Prime exclusively on the Ethereum scaling tool Polygon network.
Rob Alcorn, CEO and co-founder of Clearpool, stated in an email that his company has been “working closely with the Polygon team since we introduced the permissionless protocol on Polygon in June.” “Our relationship is quite good, and we continue to collaborate in order to provide institutional customers with DeFi solutions.”
Borrowers will be able to build credit pools on Clearpool Prime, which will function as an institutional-grade capital marketplace, and liquidity providers will be able to invest in order to earn yield. According to a report that was published earlier by CoinPosters, the platform is scheduled to begin running sometime during the first quarter of this year.
Jakob Kronbichler, the co-founder of Clearpool and chief operating officer, said in a statement, “Expect to see a wide range of borrower profiles: from traditional trading organizations to other types of crypto-native players.” “Prime is also appealing to fintechs that provide lending solutions in the traditional finance (TradFi) sphere,” for example, loans in developing economies.
The protocol announced on Monday that the onboarding and whitelisting procedure for institutional borrowers and lenders is now available. This information was included in the press release that was released by the protocol. Know-your-customer checks, abbreviated as KYC, are something that both institutional borrowers and lenders have to go through in order to be in full compliance.
It is notable that Clearpool has decided to build on Polygon rather than Ethereum’s network because most borrowing and lending activity on competing protocols, such as Maple and TrueFi, occurs on Ethereum’s network.
Polygon is a sidechain for Ethereum that provides cheaper and faster transactions by batching transfers on its own proof-of-stake blockchain while depending on Ethereum’s network for security. These benefits are achieved by Polygon’s use of batching. Recently, it has been successful in securing big agreements like Instagram and Starbucks.
After the crypto market implosion of the previous year wiped out the majority of its enterprises, a burgeoning trend of decentralized lending protocols is catering to institutional capital with TradFi-compatible products. The introduction of Clearpool Prime demonstrates this developing tendency. According to statistics provided by DefiLlama, since November, Clearpool’s loan book has decreased to less than $10 million, falling from $108 million previously.
During this week’s episode of CoinPosters’s Money Reimagined podcast, Colin Butler, who serves as the global head of institutional capital at Polygon, projected that the year 2023 will be a watershed moment for the institutionalization of decentralized finance.
According to data provided by CoinPosters, MATIC, which is Polygon’s native currency, is one of the cryptocurrencies that has performed the best so far in 2018. It has increased in value by almost 68% since the beginning of the year.
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