Interest Rates
On Clearpool, interest rates are driven by the market forces of supply and demand. Pool interest rates are dynamic, they follow a curve and fluctuate depending on the proportion of pool liquidity being utilized by the borrower at any given time – the utilization rate.
Pool interest is accrued on every block and automatically added to the balance of liquidity owed by the borrower. All else equal, this increases the borrower’s utilization rate.
The amount and frequency of each repayment is of the borrower’s choosing, so long as the utilization rate stays below a predetermined level set by governance (see Default for more information).
Clearpool will soon introduce an Oracle system, whereby a number of contributors (Clearpool Oracles) will be tasked with providing the parameters that shape the interest rate curve.
CPOOL holders, via staking, will be able to delegate CPOOL voting power to a Clearpool Oracle, and receive a yield on staked & delegated CPOOL.
At the end of a weekly epoch, the distribution of data provided by the Oracles will be used to shape the curve for the following epoch.
The Oracles whose inputs fall within a set range of the median will be awarded with a proportionate share of the CPOOL rewards emissions for that epoch.
These rewards, in turn, will be proportionately distributed to the CPOOL holders who delegated voting power to the successful Oracle(s), minus the Oracle's fee.
This utility feature of the CPOOL token helps to secure the IR pricing model, and ensure that the curve accurately reflects current market conditions. See CPOOL staking for more information.
For more technical detail on interest rates, please see the IRM Technical Papers below.
IRM v2 Technical Paper.pdf
New IR Model Launched June 2022 (plus other models evaluated)
IRM Technical Paper.pdf
Original IR Model & Other Formulas
Last modified 1mo ago
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