Meet Clearpool’s New Credit Vaults: Revolving Lines of Credit

Institutional credit is increasingly conducted on-chain, yet many borrowers still rely on fixed-term loans built for more static funding needs. While these structures work when liquidity requirements are stable, they are less efficient for desks with variable or seasonal demand since interest is paid on the full notional amount regardless of actual utilization.

Clearpool’s new Credit Vaults introduce a revolving line of credit (RLOC) structure tailored to this setting.

Borrowers draw and repay in line with their liquidity needs, while lenders earn on the full commitment through a combination of utilization and undrawn economics, with the option to deploy unutilized balances into approved on-chain lending protocols. This enables Credit Vaults to align costs and returns more closely with real usage, creating a more efficient structure for both borrowers and lenders.

How the RLOC Structure Works

The new Credit Vaults operate similarly to a traditional revolving facility: the borrower receives a committed line and draws as required.

Each facility is configured with a maximum capacity, pricing parameters, utilization rules, and a whitelist of lending protocols such as Aave and Compound where any unutilized capital will be deployed.

By design, capital in an RLOC Vault is either:

• Utilized as a loan to the borrower, or
• Deployed into money markets as a liquidity provider.

Whenever the borrower has not drawn the full line, the remaining undrawn capital is automatically supplied to approved lending markets.

LP tokens remain in the vault and are automatically redeemed when the borrower requests additional liquidity. All yield (whether from borrower interest, undrawn fees, or external deployment) accrues to the pool and is reflected in lender returns.

This structure preserves the operational simplicity of a line of credit while adding a controlled, transparent mechanism for making committed capital more productive.

Comparative Example: Fixed Term Loan vs. RLOC Vault

Consider a $10M facility where the borrower only requires $5M of liquidity.

1. Fixed Term Loan (100% drawn)
With a fixed-term loan, the borrower draws the full $10M on day one and pays a single rate on the entire amount, even though they only use $5M.

Assume a borrow rate of 11%:

• Borrower cost: 11% APR
• Lender yield: 11% APR

2. Clearpool RLOC Vault
With a Clearpool RLOC Vault, the same $10M is committed, but the borrower only draws what they need. Any unutilized capital is automatically deployed into money markets such as Aave and Compound.

Assume:

• Utilized rate: 15%
• Undrawn fee: 4%
• DeFi yield on undrawn capital: 4%
• Average utilization: 50% ($5M drawn, $5M undrawn)

Borrower cost: 0.5 x 15% + 0.5 x 4% = 9.5%

Lender yield: 0.5 x 15% + 0.5 x (4% + 4%) = 11.5%

Side-By-Side Comparison

In other words, the RLOC structure enables borrowers to achieve a lower effective borrowing cost at the same time as lenders earn a higher effective return on the same $10M commitment.

Enhanced Yield Profile for Lenders

In a fixed-term loan, lenders earn a single, fixed rate on the full notional. The return is predictable but does not respond to utilization patterns.

Credit Vaults create a more attractive yield structure:

• A differentiated rate on utilized capital that reflects the flexibility given to the borrower.
• A low-risk DeFi yield on all unutilized capital, which is continually deployed into overcollateralized lending markets such as Aave and Compound.
• Undrawn fees paid by the borrower on committed but unused capital.

Because unutilized balances are always in money markets rather than sitting idle, lenders earn across the entire facility regardless of how much the borrower draws at any given time. The result is an effective return profile that can exceed that of a comparable fixed-term loan, while preserving clear, facility-level risk parameters.

Flexible Liquidity for Borrowers

While the vault is designed to improve lender yield, it simultaneously provides borrowers with operational and economic benefits.

Borrowers draw only what they need and repay as conditions change, instead of paying full-rate carry on an amount that may not be consistently deployed. The facility maintains buffers and automatically manages redemptions from external protocols, ensuring liquidity remains predictable within the parameters defined for that vault.

This pay-as-you-go structure is particularly well-suited to desks with variable or seasonal funding needs, where liquidity requirements can shift meaningfully over time.

A More Aligned Framework for On-Chain Credit

Clearpool’s new Credit Vaults represent a structured evolution of institutional on-chain credit. By combining the flexibility of a revolving facility with mechanisms that keep committed capital productive, they create a model in which borrower usage patterns and lender returns are naturally aligned.

As on-chain credit markets mature, structures that balance liquidity, efficiency, and transparency will define the next phase of institutional adoption. Credit Vaults are designed to meet that standard, delivering a more adaptive foundation for stablecoin-based credit for both lenders and borrowers.