Clearpool, a pioneering on-chain credit marketplace, has announced its expansion to Avalanche with the debut of its new real-world asset (RWA)-backed product, Credit Vaults. This strategic move aims to further revolutionize the decentralized finance (DeFi) space by providing stable rates and more stable liquidity for on-chain borrowers, particularly targeting fintech and payment companies.
While Clearpool‘s permissionless pools have already made significant strides in bringing private credit yield to DeFi for trading firms and market makers, Credit Vaults offer a fresh approach. They allow borrowers to set personalized terms, including interest rates and repayment frequencies, thereby providing them with greater flexibility. Additionally, by enabling 100% utilization, Credit Vaults increase lending volume and protocol revenue, optimizing interest rates for lenders.
Morgan Krupetsky, Senior Director of BD for Institutions and Capital Markets at Ava Labs, expressed enthusiasm about the collaboration, stating, “Avalanche is the ideal platform to support the launch of Clearpool’s Credit Vaults. The collaboration with Clearpool showcases a mutual commitment to developing innovative digital financial products and a shared focus on bringing tokenized assets and greater utility into the Avalanche ecosystem.”
Institutional Adoption of DeFi Accelerates
In a noteworthy collaboration, Banxa, a publicly listed global infrastructure provider enabling embedded crypto payments, has teamed up with Clearpool to launch the inaugural Credit Vault. Initially, Banxa will borrow up to USDT 5 million through this platform. Lenders will benefit from the flexibility of a seven-day repayment window and additional rewards paid in the AVAX token.
Holger Arians, Chairman & CEO of Banxa, commented on the partnership, saying, “Clearpool’s Credit Vaults offer us the flexibility to meet our liquidity requirements, allowing us to set our own terms and attract a wider range of lenders. With their seamless and efficient on-chain credit solution, we are excited to develop our relationship with Clearpool as our demand for working capital continues to grow with rapidly rising transaction volumes.”
The launch of Credit Vaults signifies a significant milestone in the RWA space, offering the most liquid and short-term fintech pools available. Institutional adoption of crypto and DeFi is on the rise, with an increasing demand for on-chain credit. Clearpool has already facilitated loans for over 20 institutions, including Wall Street titan Jane Street, positioning itself as a frontrunner in this burgeoning trend.
Jakob Kronbichler, CEO & Co-founder of Clearpool, highlighted the importance of this development, stating, “Launching Credit Vaults on Avalanche marks a major milestone for Clearpool and the RWA sector as we 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 drive institutional adoption.”
Cauris, a specialized investment firm focusing on private credit solutions for fintech companies, has designed, will oversee, and acts as the servicing entity for the Credit Vault. They have instituted robust security protocols, such as direct oversight of specified bank accounts for fund management and essential covenants, to safeguard the system’s integrity.
Overall, the launch of Clearpool’s Credit Vaults on Avalanche signifies a paradigm shift in on-chain RWAs, with Clearpool leading the way in introducing institutional borrowers to the DeFi landscape. With its innovative approach and strategic partnerships, Clearpool is poised to reshape the future of decentralized lending and credit markets.