# 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 Liquidity can be withdrawn at any time subject to pool availability, with no lock-up periods.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%**

{% hint style="success" %}
Official Dynamic Pools : [Link](https://clearpool.finance/lending#:~:text=Nothing%20to%20show.-,DYNAMIC%20POOLS,-Withdraw%20anytime%20%2D%20subject)
{% endhint %}

### Learn More

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

{% file src="/files/AbUyEWUi0yBaDrCyIcQS" %}
New IR Model Launched June 2022 (plus other models evaluated)
{% endfile %}

{% file src="/files/Dmr64Ah0iNc6InFISBsr" %}
Original IR Model & Other Formulas
{% endfile %}


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```
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```

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The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.