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DeFi Protocol Clearpool Chooses Polygon Network for Its Institutional Lending Platform

DeFi Protocol Clearpool Chooses Polygon Network for Its Institutional Lending Platform

Clearpool, a decentralised finance (DeFi) protocol, announced in a statement that it will exclusively deploy its institutional credit platform Prime on the Ethereum scaling tool Polygon network.

“We’ve been working closely with the Polygon team since we launched the permissionless protocol on Polygon in June,” Clearpool CEO and co-founder Rob Alcorn said in an email. “We have a strong relationship and will continue to collaborate on institutional DeFi products.”

Clearpool Prime will function as an institutional-grade capital marketplace, allowing borrowers to create credit pools and liquidity providers to invest for yield. According to CoinDesk, the platform will go live in the first quarter of this year.

“Expect to see a diverse range of borrower profiles, ranging from traditional trading firms to various types of crypto-native players,” said Jakob Kronbichler, co-founder and chief operating officer of Clearpool. “Prime is also appealing to fintechs that provide TradFi (traditional finance) lending solutions, such as loans in emerging markets.”

According to the protocol’s press release, the protocol also opened the onboarding and whitelisting process for institutional borrowers and lenders on Monday, who must undergo know-your-customer (KYC) checks to be fully compliant.

Clearpool’s decision to build on Polygon is significant because borrowing and lending activity on competitor protocols such as Maple and TrueFi took place primarily on Ethereum’s network.

Polygon is an Ethereum sidechain that offers cheaper, faster transactions by batching transfers on its own proof-of-stake blockchain while relying on Ethereum’s network for security. It has recently secured notable partnerships with Instagram and Starbucks.

Clearpool Prime’s launch is part of a growing trend of decentralised lending protocols catering to institutional capital with TradFi-compatible products after the crypto implosion of last year wiped out the majority of its businesses. According to DefiLlama data, Clearpool’s loan book has dropped below $10 million from $108 million since November.

On this week’s CoinDesk Money Reimagined podcast, Colin Butler, Polygon’s global head of institutional capital, predicted that 2023 will be a watershed year for institutional decentralised finance.

MATIC, Polygon’s native token, has outperformed the top ten cryptocurrencies this year, gaining 68% since January 1, according to CoinDesk data.

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