AMA Recap: CryptoDiffer x Clearpool — English Edition

Today’s AMA CryptoDiffer hosted an AMA with Clearpool’s CCO Jakob Kronbichler. For those who missed the chat, we’ve got you covered with the detailed recap below.

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CryptoDiffer AMA Recap

Intro

Q1: Can you introduce yourself to our community?

I am Jakob from Italy (even though I have a very German name). I am one of the Co-Founders and the Chief Commercial Officer at Clearpool, mainly taking care of Business Development and fundraising. Previously I helped scale two marketplace ventures for an internet incubator called Rocket Internet. Both companies went from inception to IPO within a few years, an exciting and fast-growth environment (a bit like crypto 😀). Afterward, I moved into Fintech and led the commercial part of a digital bank and alternative lending player.

Being an active investor in Crypto already for a few years, the rise of DeFi platforms like Compound and Aave (DeFI summer 🚀) made me realize I wanted to get into Crypto and DeFi full time. When I met my co-founders Rob and Alessio and heard the idea of Clearpool for the first time, I knew this was the opportunity I was looking for!

Q2: Can you introduce Clearpool to us?

Clearpool is a DeFi protocol for unsecured loans for Crypto institutions, solving the problem of overcollateralization in DeFi. As most of you probably know, the main lending protocols like Aave and Compound require you to put up more collateral than your loan amount.

Institutional borrowers (mainly trading firms initially) can open liquidity pools, attract liquidity directly from the DeFi ecosystem, and further fund their trading strategies.

Anyone can be a lender to these institutions (usually, these opportunities are only open to other institutions) and get rewarded with higher APYs for unsecured lending. Pool APYs are also enhanced with additional rewards paid in CPOOL — Clearpool’s governance token.

Q3: Let’s now talk about the milestones you have achieved so far and about your upcoming plans?

We have closed our private sale in September. We are happy to be supported by some great investors such as Sequoia Capital, Arrington XRP, HashKey, Wintermute, Sino, Huobi, and many more.

At the end of October, we had our TGE listed on Ascendex, Kucoin, and Gate. So far, CPOOL has been performing pretty well lately; unfortunately, it went a bit lower together with many other Altcoins. Still, we hope we can soon gain momentum again as there are a lot of exciting updates coming up.

We are about to deploy our testnet very soon in December and will invite some members of the community as well as early users to test it. Mainnet launch with first pools is scheduled for January.

We are currently focusing on building a strong ecosystem of borrowers and lenders. Some of the initial borrowers we announced so far are Amber, Wintermute, and FBG, with many more being announced very soon. We already have a very significant amount of liquidity committed from lenders to launch the protocol with significant pool sizes and start with a signficant TVL from the get-go.

As for partnerships, we want to grow together with the DeFi ecosystem, and therefore we place high importance on this. We have partnered up with X-margin for credit risk assessment and Lithium as a solution to price Clearpool’s LP token. We are having some more exciting partnerships coming up in the coming weeks, so stay tuned

Also would like to take this chance to promote our webinar next week:

Click here to sign up for the webinar.

We will discuss together with some great speakers from Sequoia, Pantera, and Lithium. Sign up if you are interested. I hope to see many of you there.

Sign up for the webinar here.

Q4: Who will the users/clients be on your projects, and what are some examples of use cases for them?

On the borrowing side, our initial borrowers are mainly crypto native trading firms; most are market makers and executing market risk neutral strategies (high-frequency trading mostly). Some of the initial borrowers are we have announced so far are Amber, Wintermute, FBG, and Folkvang.

We are also actively talking with several non-crypto native and very established traditional trading firms interested in becoming borrowers on Clearpool. Ultimately any institution can be a borrower on Clearpool, and we also expect DeFi projects to become borrowers on Clearpool.

As for lenders, it’s both retail and institutions. Anyone in the DeFi ecosystem can become a lender, and it will be very attractive with significant token incentives on top of the interest rates paid by the borrowers. So our protocol will be very attractive for retail investors and members of our community. the protocol’s purpose is also about giving regular people the opportunity to participate in the success of these larger trading firms, something that usually only larger guys can do

Besides that, we have a lot of institutional investors committed to becoming lenders on Clearpool. Initially, it will be mainly crypto native institutions (VCs, lending, and trading players) and family offices, but we also have some traditional institutions interested in becoming lenders. Ultimately we believe the big opportunity lies in getting more traditional lenders, and we are already putting the necessary measures in place to achieve that.

Q5: Let’s talk about the current landscape of other projects doing something similar. What separates you from some of the competitors?

So generally, the largest lending players in the market are protocols that work based on overcollateralization, such as Compound and Aave. These protocols have locked a significant amount of capital. They are very safe for lenders, but they are capital inefficient and not suitable for large trading firms.

In the unsecured loans space in DeFi there we often get compared to 2 other protocols: TrueFi and Maple Finance.

While we are solving the same problem, Clearpool is introducing several novelties:

Firstly, Clearpool pools are borrower specific, which allows for more sophisticated risk management for lenders. Secondly, pool interest rates are not static but dynamic and rise and fall as a function of the pool utilization rate. Continuous pools and this dynamic interest rate mechanism will always lead to an equilibrium level of interest rate and pool size for each borrower. Clearpool eliminates the requirement for regular interest payments and the repayment of principal.

That’s it broadly speaking 😉

Community Questions

Q: Cryptomania: CPOOL was launched in late October. Can you tell us some of the achievements of Clearpool from October till this moment? Is the Clearpool mainnet already live? If not, how soon should we expect the mainnet launch of CPOOL?

Mainnet is not yet live. We are about to deploy testnet and will invite some members of the community as well as some borrowers and large lenders to try it out. We are scheduled to launch the mainnet and initial pools in January.

Q: Peace be on you: Can you describe your partnership with #HEX Trust and the services they rendered towards the development of Clearpool? Can your followers vote on the partnership they would love Clearpool to establish or other major decisions on? Simply put, do you have DAO?

Hex Trust is one of our closest partners and early investors. They are a digital asset custodian with licenses in Singapore and Hong Kong and a trusted industry player. They are taking over the KYC/AML part on the borrowing side and provide a verified custodial address that borrowers must use to withdraw liquidity. By doing this, they help us to prevent possibilities of fraud, making the protocol safer.

Q: buy high sell low: 1) I see that you currently have pre-staking. Could you tell us which exchanges it’s presently available, how can we take part, and what benefit is it?

2) Regarding Risk Management, what are some of the risk-mitigating strategies you’ve put in place to help safeguard lenders and borrowers on ClearPool?

1. Pre-staking is available on Kucoin and AscendEX; you will currently earn 100% APR. You can also provide liquidity on Uniswap and stake on our platform, earning 600%+ APR currently.

2. As mentioned, we do a KYC via a licensed custodian. Furthermore, we conduct sophisticated credit risk scoring via zero-knowledge proof technology evaluating trading patterns and the overall balance sheet strength of the borrowers.

Q: Furiosa III Chan:🪴How does Clearpool reward, liquidity providers? Can you tell us about your income model for those who provide liquidity to the platform? What advantages do you offer?

We mainly incentivize lenders on Clearpool that fund institutional borrowers. Besides the attractive interest rates that borrowers pay, lenders will be rewarded further via attractive CPOOL rewards. Rewards will also depend on the lock-up period and involvement with the protocol’s governance.

Q: Dinc: DeFi is quite complicated, especially for newbie users. Does Clearpool have a plan to do it easier for inexperienced users? Are newbie and even non-crypto users in your target audience?

Good point, and I fully agree. We are working on some better explainers, both in text and videos, making it easier to understand for everyone (also people without a finance background)

Besides that, our product will be user-friendly, and the returns will attract retail and institutional investors. We recently announced we are building on Polygon and will announce other chains soon that make it less costly for everyone to participate.

Q: Abisola: As a community member, I always appreciate a platform where my voice will be heard and where my opinion won’t be disregarded. In what ways will Clearpool give power to its token hodlers? Will there be a full decentralized governance system in place which will allow CPOOL holders to propose, vote, and implement future changes and upgrades to the protocol?

Correct, it will, however, happen in stages. We will gradually move towards a full decentralized protocol, while initially some critical decisions will be taken by the team (but always communicated to everyone)

Q: i thingking about me || Buy PCX ;*: Partnerships are essential for adoption. Could you share some of the partners and What partners do you have currently, and is there any partnership that will be established in the near future Clearpool?

I cannot comment on the future, but some exciting ones with high-profile partners are coming up.

So far, we have mainly partnered with Hex Trust for KYC, X-Margin for credit risk assessment, and Lithium for lpToken pricing. We also announced a partnership with Polygon, our first layer 2 solution.

Q: Kenechukwu: I learned that for institutions to gain access to unsecured liquidity via the Clearpool protocol, these institutions must first become whitelisted. In this regard, I wish to ask; What are the basic requirements that should be satisfied before borrower institutions can be whitelisted, and who supervises the whitelisting process? Finally

The community will decide based on the strength of the proposal, including the reputation and credit rating of a borrower.

The trading of cpTokens will be mainly enabled in phase 2 of the protocol, but this will be a very exciting part of the project.

Q: Memo: I read that interest rates are driven by market supply and demand forces, but could you really explain how this will work? And they also have a minimum and maximum established of how much will these interests fluctuate between?

It will be an interest rate curve for each borrower, similar to what you can see for different cryptocurrencies (e.g., USDC or ETH) on Compound. The interest rate will increase as the utilization rate increases, which will result in an equilibrium rate for each borrower.

Q: Boylut: I would like to know the primary target users for your lending and borrowing feature? Is it the crypto institutions, family offices, traditional institutions, or retail investors like me? What effort are you making to significantly enhance the user experience for Clearpool users? How do you intend to make the platform easy and user-friendly?

I guess both are important to us, retail investors and institutions. While institutions can provide a large amount of liquidity, we will need to have a product suitable for smaller investors to scale and become one of the largest lending protocols in DeFi.

We think we have an accessible platform that retail investors can engage with. We will have second layer and multi-chain solutions in place to allow participation in the protocol at a reasonable cost.

Q: Shandukani: I’ve seen platforms where institutions can borrow unsecured through multiple borrower pools. So what problem does Clearpool see with such a platform, and why should we prioritize your solution over theirs?

As mentioned above, while we are solving the same problem, Clearpool is introducing several novelties:

Firstly, Clearpool pools are borrower specific, which allows for more sophisticated risk management for lenders. Secondly, pool interest rates are not static but dynamic and rise and fall as a function of the pool utilization rate. Continuous pools and this dynamic interest rate mechanism will always lead to an equilibrium level of interest rate and pool size for each borrower. Clearpool eliminates the requirement for regular interest payments and the repayment of principal.

About Clearpool

Clearpool is a Decentralized Capital Markets Ecosystem, where institutional borrowers can create single borrower liquidity pools and compete for uncollateralized liquidity directly from the DeFi ecosystem.

Liquidity providers on Clearpool can earn attractive yields, with pool interest rates enhanced by additional LP rewards paid in CPOOL — Clearpool’s utility and governance token.

Clearpool LP tokens, called cpTokens, are the building blocks for a system of tokenized credit that will provide Clearpool LPs with risk management and hedging capabilities. As more institutions realize the benefits that decentralized finance can bring to their organizations, Clearpool will provide the new architecture to facilitate flows between the $120 trillion traditional capital markets and the burgeoning DeFi ecosystem.

Clearpool is backed by a long list of top investors from traditional venture capital and blockchain, including Sequoia Capital India, Arrington Capital, Sino Global Capital, Hex Trust, Huobi Ventures, Kenetic, HashKey, and many more.

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