Thread by @Rob8830

Single borrower pools. The simple but powerful concept introduced by @ClearpoolFin that is revolutionizing lending markets.

How?

Read on.. 🧵

To borrow without collateral in DeFi you need to be an institution with a track record, solid reputation and be able to provide quality financials/DD/KYC docs etc. In short, uncollateralized DeFi borrowers are quality, vetted institutions

On #Clearpool you get to decide exactly which of these institutions you want to lend to, and which you don't. On other UC lending protocols with multi-borrower pools its done differently, your funds there are allocated by a more centralized third party

Professional and institutional investors do not need to trust third parties to manage their funds. They are professional and institutional investors because they can do that themselves. They do their own risk assessments and make their own decisions

#Clearpool not only gives lenders the ability to make their own decisions, but also compensates all lenders for liquidity risk. Something else that you don’t see on other UC lending protocols. What is liquidity risk?

On #Clearpool lenders can withdraw any time as long as there are funds in the pool that the borrower is not using. But when the borrower uses more funds, the interest rate they pay goes up. So less money available in the pool for withdrawals = more liquidity risk = higher yield

This is important for all lenders including professional and institutional investors who need the ability to monitor and manage risks to ensure that their exposures remain within risk and compliance agreed mandates, and it's all made possible by single borrower pools

Single borrower pools also lay the foundations for further product innovations that will assist in the management of risk, like thematic pools, credit/IR derivatives and structured products - watch this space

Another cool feature of single borrower pools is notifications. Did you know you can get notified when a pool reaches a certain % of APR or utilization?
docs.clearpool.finance/clearpool/how-…

And now for some alpha, because I know you love alpha! Clearpool Interest Rate Model (IRM) v3 is coming! This update will introduce another level of sophistication to what is already an unrivaled mechanism in DeFi lending markets

After v3 is implemented, pool IR curves will automatically adapt for things like credit spreads (based on borrower rating), liquidity concentration, pool size & pool longevity. Next level innovation also made possible by single borrower pools. This is coming in Q4

So, as more and more institutional players enter the crypto and DeFi ecosystem, lending protocols that offer the most decision making flexibility, ability to manage risk and product innovation will prosper the most

And for those institutions with higher KYC and compliance requirements, Clearpool has that covered too. Did I mention we are building a new permissioned product? Let’s save the alpha on that until the next time.. 😉