This week’s Wealth Mastery Altcoin Review will discuss “What is Clearpool Finance?”
- What Is Clearpool Finance (CPOOL)?
- How Do You Use Clearpool Finance?
- What Is CPOOL Token?
- How Do I Buy Clearpool Finance?
- Does Clearpool Finance Have A future?
What Is Clearpool Finance?
Simply put, Clearpool Finance is an uncollateralized lending service that provides unsecured loans for institutions. Clearpool launched on the Ethereum mainnet in March and on Polygon in July. Clearpool Finance was the first marketplace available where trading firms could borrow without significant collateral. Since then, several other products have been released in the market, with nothing incredible separating one from the other. These permissioned pools are available to accredited institutions to borrow funds from any user that’s willing to loan it to them.
Clearpool Finance recently appeared in the news regarding Alameda Research’s scam. This is because Alameda Research had created millions of dollars in unsecured loans on Clearpool Finance before its bankruptcy. Compound Capital Partners and Apollo Capital loaned Alameda USDC from their investment pools. The pools were eventually closed when Chapter 11 was filed for FTX and Alameda Research—giving Alameda millions in free capital. Multiple other pools began defaulting with uncertainty around the degree to which Clearpool could be exposed to Alameda Research. But this had nothing to do with Clearpool, the protocol simply operates as a middleman between institutions who want to loan and those who want to borrow.
Clearpool Finance had no exposure to FTX or Alameda because they picked Hex Trust in 2021 as the Custodian of their funds.
Hex Trust has been a trustee of Algorand, Tezos, and Celo blockchains. Based in Hong Kong, Hex Trust raised $100 million this year from over 3 dozen investors. Announced after the FTX filings, Hex Trust relayed to all investors that it would be taking a wait-and-see approach to the current market conditions. The firm would not look to take on any new positions or leverage its current ones. The firm stated on Twitter, “Strong players must act to restore confidence in crypto and the blockchain. Hex Trust is waiving custodial fees for exchanges to secure their clients’ assets during the storm. Transparency, on-chain asset segregation as proof of reserves. No more excuses.” Hex Trust seems to be the right choice for Clearpool to trust its assets with.
The current market drought has brought serious liquidity crunches throughout all industry sectors. Many investors have withdrawn their funds from liquidity pools and lowered their utilization rates to zero. Protocols like Clearpool offer trading firms the ability to open lines of credit based solely on their reputation and loan that capital out to other accredited firms. If it seems a little risky, that’s because it is. But, Clearpool has been great at managing that risk by coming nowhere close to over-leveraging their reserves and liquidity against a firm’s biggest risk, each other.
So far, besides Alameda Research, Clearpool has picked net-positive institutions to do business with. All pools, except two, have repaid and removed their loans. One on Ethereum and one on Polygon. Since the only pools currently open are operated by one firm. Clearpool has…
Head of Research Jesse is a passionate seeker of truth who enjoys educating others about Bitcoin. As a free thinker and 2nd amendment advocate, Jesse believes each individual has the right to monetary freedom. “The swarm is headed towards us” -Satoshi Nakamoto
