To launch a liquidity pool, institutional borrowers must first become whitelisted by making a proposal to the Clearpool community - CPOOL token holders.
Achieved by generating a unique code within the borrowers account at a Clearpool governance approved digital asset custodian.
Borrowers must stake CPOOL to be eligible to make a proposal. Current staking amount is CPOOL 100,000. This amount can be changed through governance.
The proposal enters a 72 hour voting period.
CPOOL token holders will have the opportunity to vote on all borrower proposals.
Voting power can be delegated to a CPOOL holders own address, or any other network address. Voting begins when a proposal is submitted and lasts for 72 hours.
Following a successful whitelisting process the pool can be launched and listed on the main Clearpool dashboard where it can be viewed and funded by liquidity providers.
Whitelist voting will be available shortly after Clearpool is launched. Prior to this, early proposals will be assessed and whitelisted by the Clearpool team.
Clearpool is permissionless for liquidity providers. Anybody can take advantage of the opportunities that are available on Clearpool.
Supplying liquidity to a pool is a simple process. Connect to the app via web3, select a pool, supply USDC liquidity to the selected pool.
Supplying liquidity to a pool returns cpTokens - LP tokens applicable to the pool that has been funded.
cpTokens represent the liquidity supplied, automatically accrue the pool interest on every block, and represent the risk profile of the pool borrower.
cpTokens are redeemable, subject to available liquidity, and can be traded in a secondary market for additional liquidity and risk management.
The interest rate mechanism for each pool is identical, and derives its main input from the utilization rate.
The utilization rate represents the amount of liquidity that the borrower has removed from the pool at any point in time. As such, the interest rate for each pool will rise and fall with the utilization rate.
This process, which is driven by the market forces of supply and demand, ensures that each pool will always reach a state of equilibrium in terms of interest rate and pool size.