By
Svetlana Soroka
April 29th, 2024
Clearpool, an on-chain credit marketplace linking institutional borrowers to lenders in the crypto industry, has entered the Avalanche ecosystem with the introduction of Credit Vaults, a unique offering supported by real-world assets (RWAs).
Clearpool’s new vaults aim to utilize RWAs such as private credits to provide uncollateralized borrowing for institutions, bringing private credit yield to the decentralized finance (DeFi) ecosystem. The product is targeted at trading firms, market makers, fintech companies, and payment companies.
Exclusive Availability on Avalanche
According to a recent announcement, Credit Vaults will be exclusively accessible on Avalanche, as part of its expansion into the layer 1 blockchain, where the first Clearpool RWA pool will be hosted.
Launched in collaboration with Banxa, a prominent global infrastructure provider focused on embedded crypto payments, the offering is designed to meet the needs of both lenders and borrowers in the crypto space.
The partnership with Banxa aims to transform the borrowing and lending landscape within the blockchain ecosystem, offering a new level of efficiency and transparency.
Clearpool will be responsible for tokenizing loans made to Banxa and transferring them on-chain. In return, lenders receive cpTokens, representing their stake in the pool, with interest automatically compounding. This innovative model streamlines the lending process, providing borrowers and lenders with a secure and seamless experience.
A Seven-day Repayment Period
The Credit Vault has a seven-day repayment period, providing borrowers with flexibility and ensuring timely repayment.
Moreover, lenders are incentivized with additional rewards in AVAX tokens, enhancing the overall value proposition for participants in the lending pool.
Unlike traditional lending platforms, Clearpool’s Credit Vaults offer borrowers the freedom to set their own terms, including interest rates and repayment frequencies. This flexibility is expected to attract a wide range of borrowers, leading to higher lending volume and increased revenue for the protocol.
For lenders, the vaults promise higher annual percentage yields (APYs) through 100% utilization of funds, making interest rates more efficient. This innovation is set to make DeFi lending more accessible and lucrative for all participants.
A Significant Milestone
Clearpool’s CEO Jakob Kronbichler described the company’s expansion to Avalanche as a major milestone for Clearpool.
“Launching Credit Vaults on Avalanche is a major milestone for Clearpool and the RWA sector as we truly pioneer migrating credit on-chain. Working with prominent players such as the listed fintech, Banxa, and experienced credit fund, Cauris, validates the enormous potential of Credit Vaults to revolutionize the RWA DeFi space and expedite institutional adoption,” said Kronbichler.
The launch of the credit vaults comes at a time when RWAs are experiencing “explosive” growth on the Avalanche ecosystem.
Last year, the protocol introduced its Avalanche Evergreen Subnets which offers financial services companies a medium for testing tokenization and the merits of on-chain finance in a controlled environment.
Companies such as Onyx, introduced by banking giant J.P. Morgan, were among the first firms to explore the Evergreen Subnet in testing how tokenization could potentially help automate portfolio management.