Investor Interview Series: Sino Global Capital
During this series, we’ll be interviewing Clearpool investors and getting their insights on everything Clearpool-related. First up is investor and Clearpool Oracle, Sino Global Capital!
1. As an early investor in Clearpool, has the project’s progress met your original expectations?
During our due diligence process, we saw first-hand the quality of the Clearpool team and their vision and had high expectations. The Clearpool team has surpassed our expectations and made huge strides in delivering a best-in-class, on-chain credit marketplace.
2. What compelled you to first invest in Clearpool, and do you still back that thesis?
Our thesis on Clearpool was simple. There are four (main) sources of credit for institutional traders:
- Centralized credit desks
- Uncollateralized DeFi lenders
- Exchange lines of credit
- Bespoke loans
Centralized lending desks, the largest of the credit sources, were attaining the majority of their lending supply through customer-facing applications. There were principal-agent issues inherent in this model.
We believed new lending models would emerge and other smaller sources of credit, such as uncollateralized DeFi lenders, would grow in importance and size.
Running an on-chain crypto credit marketplace on-chain has numerous advantages. Notably, transparent and on-chain loan repayments, the ability to offer lending products to a wider range of customers, the ability to tokenize loans and create loan derivatives, etc.
Therefore, we saw a huge opportunity in investing in a DeFi crypto credit platform.
Finally, we 1) knew the quality of the Clearpool team and 2) thought that offering single counterparty pools had a great product-market fit and appealed to institutions.
Our thesis has not changed; Clearpool will continue to grow in importance as a funding source for institutional traders.
3. How has your experience been as one of the Genesis Clearpool Oracles?
Lending/borrow rates can and should change based on market conditions. Clearpool Oracles give the entire crypto credit community an observable benchmark of the price of credit.
We’ve been thrilled to see the successful launch of Clearpool Oracles and have been happy to use our models as inputs to ensure that credit on Clearpool is priced fairly.
4. What excites you about the on-chain credit market and Clearpool’s role in it?
Healthy crypto institutional credit markets are vital for healthy crypto trading markets that are deep and liquid enough to allow for sophisticated participants to enter at size.
We detailed the importance of crypto credit here:
Furthermore, while credit is vital to healthy markets, many of the main centralized lending desks providing more than $20B+ credit in 2021 exited the market. This created an immense opportunity for Clearpool to provide needed credit with an improved and sustainable business model.
Clearpool will continue to be a leader in the on-chain credit markets for years to come.
5. Finally, what are your top three favourite things about Clearpool?
Clearpool has nailed key product and strategic details such as:
- Providing single counterparty pools (to cater to institutional lenders)
- Adjustable interest rates (Clearpool Oracles)
- Interest rate curve shape (to optimize borrowing at 85% utilization rate)
Together these form the foundation of a fantastic on-chain credit marketplace that is optimized for institutions.
We wrote about our favourite Clearpool product features here:
Learn more about Clearpool.
