The decentralized finance (DeFi) protocol Clearpool is set to deploy its institutional credit platform Prime exclusively on Ethereum scaling tool Polygon network. This move is significant as it 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 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, and the protocol has opened the onboarding and whitelisting process for institutional borrowers and lenders, who must endure know-your-customer (KYC) checks to be fully compliant.
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.
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.
The launch of Clearpool Prime is a testament to the growing demand for DeFi products from institutional investors. It is also a sign of the increasing popularity of Polygon as a scaling solution for Ethereum, as more and more protocols are choosing to build on the network. With the launch of Clearpool Prime, the DeFi space is set to become even more accessible to institutional investors, and the future of decentralized finance looks brighter than ever.