Decentralized finance (DeFi) protocol Clearpool will deploy its institutional credit platform Prime exclusively on Ethereum scaling tool Polygon network, the protocol told CoinDesk in a statement.
“We have been working closely with the Polygon team since we launched the permissionless protocol on Polygon in June,” Rob Alcorn, CEO and co-founder of Clearpool, said in an email. “We have a strong relationship and continue to work together to deliver institutional DeFi products.”
Clearpool Prime will act as an institutional-grade capital marketplace, where borrowers can create credit pools, and liquidity providers can invest to earn yield. The platform is set to start operating in the first quarter of this year, CoinDesk reported earlier.
“Expect to see a wide range of borrower profiles: from traditional trading firms to various types of crypto-native players,” Jakob Kronbichler, Clearpool’s co-founder and chief operating officer, said in a statement. “Prime is also attractive to fintechs that provide lending solutions in the TradFi (traditional finance) world, such as loans in emerging markets.”
On Monday, the protocol also opened the onboarding and whitelisting process for institutional borrowers and lenders, who must endure know-your-customer (KYC) checks to be fully compliant, according to the protocol’s press release.
Clearpool’s move to build on Polygon is significant because borrowing and lending activity on competitor protocols like Maple and TrueFi mostly happened on Ethereum’s network.
Polygon is a sidechain for Ethereum that offers cheaper, faster transactions by batching transfers on its proprietary proof-of-stake blockchain while relying on Ethereum’s network for security. It has secured notable partnerships recently with Instagram and Starbucks.
Clearpool Prime’s launch highlights a growing trend of decentralized lending protocols catering to institutional capital with TradFi-compatible products after last year’s crypto implosion wiped out most of its businesses. Clearpool’s loan book has plummeted below $10 million from $108 million since November, data by DefiLlama shows.
Colin Butler, Polygon’s global head of institutional capital, predicted that 2023 will be a pivotal year for institutional decentralized finance on this week’s CoinDesk’s Money Reimagined podcast.
MATIC, Polygon’s native token, has been among the best performers of the top 10 cryptocurrencies this year, gaining some 68% since Jan. 1, CoinDesk data shows.