Revolving Line of Credit (RLOC)

Institutional credit is increasingly conducted on-chain, yet many borrowers still rely on fixed-term loans built for more static funding needs. While these structures work when liquidity requirements are stable, they are less efficient for desks with variable or seasonal demand since interest is paid on the full notional amount regardless of actual utilization. Clearpool’s new Credit Vaults introduce a revolving line of credit (RLOC) structure tailored to this setting.

Borrowers draw and repay in line with their liquidity needs, while lenders earn on the full commitment through a combination of utilization and undrawn economics, with the option to deploy unutilized balances into approved on-chain lending protocols. This enables Credit Vaults to align costs and returns more closely with real usage, creating a more efficient structure for both borrowers and lenders.

How the RLOC Structure Works

The new Credit Vaults operate similarly to a traditional revolving facility: the borrower receives a committed line and draws as required.

Each facility is configured with a maximum capacity, pricing parameters, utilization rules, and a whitelist of lending protocols such as Aave and Compound where any unutilized capital will be deployed.

By design, capital in an RLOC Vault is either:

• Utilized as a loan to the borrower, or

• Deployed into money markets as a liquidity provider.

Whenever the borrower has not drawn the full line, the remaining undrawn capital is automatically supplied to approved lending markets.

LP tokens remain in the vault and are automatically redeemed when the borrower requests additional liquidity. All yield (whether from borrower interest, undrawn fees, or external deployment) accrues to the pool and is reflected in lender returns.

This structure preserves the operational simplicity of a line of credit while adding a controlled, transparent mechanism for making committed capital more productive.