Credit/Macro/Crypto Analyst, Former Credit/MA PM

Rose Choy

Crypto

<ul>
<li>As the crypto lending market recovers from the shock of large defaults in the sector, the markets are now focused on institutional lending where capital efficiency and liquidity are key. </li>
<li>Overcollateralized lending has been stagnant although holding ground, but its low utilization, low interest rates and wide bid ask are not appealing to most lenders and borrowers.</li>
<li>The market preference is switching to non-collateralized lending where a mix of Cefi and Defi characteristics may evolve to provide the winning combination.</li>
</ul>


As the crypto lending market recovers from the shock of large defaults in the sector, the markets are now focused on institutional lending where capital efficiency and liquidity are key. 
Overcollateralized lending has been stagnant although holding ground, but its low utilization, low interest rates and wide bid ask are not appealing to most lenders and borrowers.
The market preference is switching to non-collateralized lending where a mix of Cefi and Defi characteristics may evolve to provide the winning combination.


Crypto Lending Series (#2) Clearpool - A Bright Spot Emerging from the Rubble

<ul>
<li>In May and June, the market witnessed Luna/UST's collapse, the liquidation of Three Arrows Capital (a large crypto fund), and insolvencies of major centralized crypto lending firms. </li>
<li>Excessive leverage, poor risk management and lending practices in the lending sector exacerbated the market sell-off amidst a global macro risk-off. How will the lending sector emerge from the rubble?</li>
<li>We discuss the crypto lending landscape, deep dive into DeFi protocols Aave and Clearpool, share insights from some institutional borrowers and come up with key lessons learned for the future. </li>
</ul>


In May and June, the market witnessed Luna/UST's collapse, the liquidation of Three Arrows Capital (a large crypto fund), and insolvencies of major centralized crypto lending firms. 
Excessive leverage, poor risk management and lending practices in the lending sector exacerbated the market sell-off amidst a global macro risk-off. How will the lending sector emerge from the rubble?
We discuss the crypto lending landscape, deep dive into DeFi protocols Aave and Clearpool, share insights from some institutional borrowers and come up with key lessons learned for the future. 


<ul>
<li>The crypto lending market has been decimated with casualties from both lenders and borrowers after the FTX fallout and credit crisis. </li>
<li>Most centralized lenders have been annihilated while DeFi platforms withstood the shock. The demand for lending has cratered and this will test the viability of existing platforms given lower volumes.</li>
<li>However, we will likely see new platforms emerge that have the necessary lending, trading and risk management expertise from traditional finance that could propel further institutional participation in crypto. </li>
</ul>


The crypto lending market has been decimated with casualties from both lenders and borrowers after the FTX fallout and credit crisis. 
Most centralized lenders have been annihilated while DeFi platforms withstood the shock. The demand for lending has cratered and this will test the viability of existing platforms given lower volumes.
However, we will likely see new platforms emerge that have the necessary lending, trading and risk management expertise from traditional finance that could propel further institutional participation in crypto. 


Crypto Lending Series #3: Light at the End of the Tunnel?

Clearpool (CPOOL CURNCY)

Crypto Lending Series (#2) Clearpool - A Bright Spot Emerging from the Rubble

The crypto lending market is now focused on institutional lending after some high profile failures earlier. The preference now is for...

Rose Choy

Crypto Lending Sector Series

As the crytpo lending crisis winds down, the restructuring phase begins. We examine the lending landscape, and two innovative protocols, and...

Rose Choy

Crypto Lending Series #3: Light at the End of the Tunnel?

The crypto lending market has cratered after lender failures and FTX's collapse. Some platforms may find themselves struggling, but we are not far...

Rose Choy