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Clearpool has launched its institutional credit marketplace, Clearpool Prime, on Ethereum rollup Optimism.
Clearpool Prime aims to tap into the $1.4 trillion traditional private credit market, and bring it on-chain.
All participants who wish to use Clearpool Prime will be mandated to participate in KYC through Securitize ID and AML checks.
According to Jakob Kronbichler the CEO and co-founder of Clearpool, all transactions on Clearpool Prime are on-chain, but only whitelisted borrowers can have visibility into counterparty names and terms.
“This approach guarantees the transparency of the ecosystem while maintaining a high level of privacy for participants. Additionally, Clearpool Prime routes flows of assets into counterparties’ wallets, minimizing smart contract risks and enhancing security,” Kronbichler said.
The team notes that 50% of the revenue generated from Clearpool Prime through loans on its marketplace will be allocated to the purchase and burn CPOOL, the protocol’s native token, and the remaining 50% will be allocated to the Clearpool Treasury.
Clearpool claims over 457 million loans have originated from its platform. DeFiLlama data shows that the protocol currently has a TVL of $44 million and CPOOL has a market cap of $26 million.
The first loan on Clearpool Prime was initiated by Portofino Technologies (borrower) and Azure Tide (lender), Kronbichler said. Clearpool noted that Clearpool Prime had been “tested by many different institutions” but declined to share details.
Bringing private credit into DeFi
The private credit sector is predicted to grow to $2.7 trillion in the next few years, according to a recent report by JPMorgan, and many other DeFi protocols outside Clearpool are also hoping to capitalize on this.
US Securities and Exchange Commission-registered investment advisor Heron Finance recently introduced robo-advisors via the Goldfinch protocol for private credit, looking to attract investors of all sizes into the crypto sphere.
Read More: Warbler Labs dogfooding its Goldfinch protocol with Heron Finance
Other protocols, such as Wildcat, take a different approach by providing the infrastructure to facilitate undercollateralized lending contracts on a peer-to-peer basis.