> For the complete documentation index, see [llms.txt](https://docs.clearpool.finance/clearpool/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.clearpool.finance/clearpool/products/lending/dynamic.md).

# Dynamic

Clearpool Dynamic is a **permissionless** lending market where anyone can provide liquidity to whitelisted institutional borrowers and earn risk-adjusted returns. Liquidity can be withdrawn at any time subject to pool availability, with no lock-up periods.

### Key Features

#### **cpTokens**

When you deposit into a Dynamic Pool, you receive **cpTokens**. These are **pool-specific LP tokens** representing your deposited liquidity with accrued interest. cpTokens can be redeemed at any time, subject to pool liquidity.

#### **Interest Rates**

Interest rates are determined by a **utilization-based curve**. Rates increase as pool utilization (borrowers withdraw funds) rises and decrease when utilization falls (borrowers repay funds). Parameters for this curve are **set through Clearpool governance**, based on input from CPOOL-staking Oracles.

#### **Credit Risk**

Borrowers in Dynamic Pools are evaluated by [**Credora**](https://www.credora.network/), a third-party provider using privacy-preserving zero-knowledge technology to produce real-time credit assessments. These ratings are independent from Clearpool and are intended to help lenders assess potential risk.

### **Risk Management and Safety Measures**

#### **High Utilization Controls**

At 95% utilization, borrower withdrawals pause until utilization drops below the threshold. 

At 99% utilization, all withdrawals by borrowers and lenders pause temporarily.

#### **Default Protection**

If utilization remains **above 95% for 5 consecutive days** (Grace Period), the pool enters default status. An auction process is triggered to recover value, with proceeds distributed to lenders.

#### **Insurance Fund**

A portion of interest earned in each pool is allocated to an **insurance fund**. This fund is used to provide partial recovery to lenders in the event of borrower default.\
The current approved parameter for insurance is: **5%**

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Official Dynamic Pools : [Link](https://clearpool.finance/lending#:~:text=Nothing%20to%20show.-,DYNAMIC%20POOLS,-Withdraw%20anytime%20%2D%20subject)
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### Learn More

For more technical detail on interest rates, please see the IRM Technical Papers below.

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New IR Model Launched June 2022 (plus other models evaluated)
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{% file src="/files/Dmr64Ah0iNc6InFISBsr" %}
Original IR Model & Other Formulas
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