Clearpool, Cicada Partner to Boost Risk Management in PayFi Lending

Clearpool, a decentralized capital markets ecosystem, has partnered with on-chain credit risk management company Cicada in a move to institutionalize PayFi lending with improved risk management.

In an announcement shared with Cryptonews on Monday, the partnership will boost Clearpool’s credibility and risk management in PayFi lending. Cicada will structure and underwrite PayFi lending opportunities and serve as the administrative agent for select Credit Pools.

Cicada has underwritten more than $850m in loans at a 1.2% default rate during the prior cycle.

Clearpool’s partnership with Cicada could shake up the lending space, bringing more institutional players into the DeFi fold.

Clearpool Expands to Payment Financing or PayFi

According to Jakob Kronbichler, CEO of Clearpool, Cicada’s risk management integration would strengthen Clearpool’s institutional infrastructure for PayFi lending.

“While stablecoin settlements are instant, underlying fiat flows are not, forcing fintechs to bridge liquidity gaps,” he said. “This partnership enhances our proven credit framework and supports the growth of the emerging trillion-dollar stablecoin payment ecosystem.”

Clearpool will be launching PayFi Credit Pools for users to access these highly liquid, real-world yield opportunities. This means facilitating credit to institutional lenders specializing in short-term stablecoin-based working capital to fintech operators.

It will also launch cpUSD, a permissionless, yield-bearing asset, which will enable retail to tap into real-world stablecoin payments.

Cicada offers Risk-as-a-Service (RaaS) Solutions to DeFi Protocols

On the other hand, Cicada offers Risk-as-a-Service (RaaS) solutions, including third-party underwriting, pool management for DeFi protocols and risk structuring.

“Partnering with Clearpool allows us to elevate PayFi lending by combining our underwriting and risk management expertise with their innovative credit products,” said Sefton Kincaid, Managing Partner of Cicada Partners.

The partnership will accelerate the adoption of PayFi by laying the groundwork for more safer, transparent and scalable stablecoin ecosystem.

“Together, we’re advancing professionally managed Credit Pools and strengthening Clearpool’s offering to borrowers and lenders in the growing stablecoin economy,” Kincaid added.