CLP (Crato Liquidity Protocol) recently released a Chinese version of the project introduction video, which is a further market expansion after the release of the English version of the video two weeks ago. CLP received developer funding from ICP in April and plans to launch a test network in June. The pace of development is very rapid.
So, what kind of project is CLP that can attract the official support of ICP? What changes will the launch of CLP bring? This article will comprehensively analyze CLP from multiple angles.
Complete analysis of the CLP project
What is CLP
CLP is a liquidity protocol based on the ICP (Internet Computer Protocol) chain, which uses the CDP (Collateralized Debt Position) model to issue stablecoins.
The goal of CLP is to provide low-cost, efficient and secure digital asset lending services. By staking ICP, ckETH or ckBTC, users can borrow stablecoin CUSD, thereby improving the liquidity of digital assets while ensuring their security.
Features and characteristics of CLP
Interest-free lending mechanism: CLP adopts an interest-free lending mechanism, allowing users to borrow the stable currency CUSD without paying interest. This zero-interest lending model significantly reduces borrowing costs and has significant advantages over traditional lending models. Competitive advantage, thereby attracting more users to participate in the financial activities of the platform.
Dual token mechanism: CLP has a unique dual token mechanism, including CUSD and CLQT. CUSD is the native stablecoin of CLP, which is pegged to the US dollar at a 1:1 ratio and is used for lending and paying platform fees to ensure price stability. CLQT is the governance and reward token of the platform. Users can obtain CLQT rewards by participating in platform activities, and there is an additional staking mechanism to help long-term holders gain returns. CLQT is actually a leverage mechanism that provides users with attractive returns beyond lending.
Efficient liquidation mechanism: In order to ensure the stability of the platform, CLP has designed an efficient liquidation mechanism. When the value of the pledged assets is lower than the set minimum value ratio, the system will automatically liquidate to protect the platform from losses. Users who participate in the liquidation can also receive rewards, which encourages the community to actively participate in the security maintenance of the platform.
Effective combination with ICP technology advantages: CLP uses ICP's high-performance technology to provide high throughput and low latency, ensuring the platform's fast transactions and processing capabilities, which not only makes the product smooth to use, but also brings efficient clearing capabilities. This is a huge advantage that the ICP chain brings to the financial ecosystem. With the help of ICP, complete decentralization at the technical level is achieved, making the platform immune to traditional server-related attacks, such as DDOS attacks, further ensuring the security of the platform.
Professional finance and blockchain team: CLP has a professional team with a strong financial background. The members have profound financial knowledge and rich experience in DeFi projects, ensuring the professionalism and sustainable development of the platform. The team has accumulated rich project experience in the Ethereum Virtual Machine (EVM) ecosystem, providing a solid foundation for the development and operation of CLP.
ICP official support: CLP has received Developer Grant support from ICP, which shows the ICP ecosystem's recognition and support for the CLP project. CLP can continue to cooperate with other projects in the ICP ecosystem to jointly promote the development and maturity of the ecosystem.
Borrowing fee mechanism: In order to manage risks, CLP charges borrowing fees, which not only compensates for the cost and risk of providing lending services, but also prevents users from over-borrowing and maintains the stability of the platform. All operations and rules are open and transparent on the blockchain, and users can check and verify them at any time, increasing trust.
User-friendliness: User-friendliness is another major feature of CLP. The platform design is simple and intuitive, and the operation process is simple and easy to understand, allowing users to easily get started, meet the needs of global users, and expand the user base.
Similar products / Competitive products
MakerDAO: As an old CDP model product, MakerDAO is still the industry leader, running in the EVM ecosystem and having the largest market share. MakerDAO has always been a traditional lending model with interest rate spread as income and has not introduced more economic models. Recently, we have also noticed that MakerDAO has made progress in the token model, which also confirms the necessity of introducing the token model.
JustStables: As you can tell from the name, this is an official product related to the TRON ecosystem. With the strong market capabilities of the TRON ecosystem, which is second only to MakerDAO in the CDP model, JustStables takes advantage of the TRON ecosystem to rapidly expand the market. , achieved remarkable success.
Liquity: Liquity is also a liquidity protocol for the EVM ecosystem. It adopts an ecological cluster approach to introduce a large number of channels for joint development. It has a similar zero-interest lending model to CLP, has developed rapidly, and has attracted a large number of users and capital.
In the ICP ecosystem, there are currently no prominent CDP model products, which provides CLP with a unique ecological advantage. CLP can take advantage of this natural condition and, with the help of ICP's high performance and decentralized characteristics, establish its own competitive advantage and attract more users and capital into the ICP ecosystem.
Platform revenue analysis
Although CLP adopts a zero-interest lending model, the platform earns revenue by charging a one-time fee. This fee is not only an important source of income for the platform, but also prevents malicious appropriation of funds. As the scale of the platform expands, the fee income will gradually increase. In addition, the appreciation of the CLQT token also brings potential benefits to the team.
The total amount of CLQT is 1 billion, of which 20% is allocated to investment institutions, 10% is allocated to the product technology team, 10% is used for marketing, and the remaining 60% is gradually released to the community through mining rewards, ensuring that a considerable portion of tokens can be used to incentivize users to participate in the platform.
Users have the opportunity to obtain CLQT mining rewards by participating in operations such as deposits, loans, liquidations, and providing liquidity to liquidation pools. Mining is a way for the platform to encourage users to participate in community building and share the success of the platform. By rewarding user participation, CLP Finance has fostered a vibrant community.
ICP Ecosystem and Market Observation
Over the past year or so, the ICP ecosystem has demonstrated outstanding performance. Although this round of bull market has not yet reached its peak, multiple tracks such as Bitcoin staking, the combination of blockchain and AI, DePIN, GameFi and other fields have shown strong growth momentum, especially in the field of AI. The AI boom has exploded in both the traditional IT industry and the blockchain industry. This phenomenon shows huge potential and stamina.
In March 2024, ICP demonstrated its obvious competitive advantage in the blockchain industry through the "AI computing in ICP contract" demonstrated by its founder Dominic (the post has been viewed over one million times and received over three thousand likes and reposts). It is estimated that no other public chain can achieve the advantage of "on-chain AI computing" in the short term.
Therefore, CLP's choice to develop in the ICP ecosystem is undoubtedly a platform with huge potential, and the CLP team has also very wisely chosen to take root in this rapidly developing ecosystem.
It can be seen from the data of DefiLlama that the stablecoin market has never been "stable". In just one week, the ranking of stablecoin size has changed significantly, and USTC, USDe, and HUSD have all performed well.
Driven by the bull market, the demand for stablecoins is also increasing. In such a market environment, CLP has the opportunity to seize a place through its unique advantages.
Exclusive interpretation and outlook
We believe that the stablecoin market still has huge development potential. The CLP team’s financial background and experience in the EVM ecosystem give them unique advantages in developing CDP-model stablecoin projects in the ICP ecosystem.
The following is our interpretation and outlook on CLP:
Zero interest loan
The zero-interest strategy can attract more users and put the base currency into a safe, stable and profitable CDP model product. Justin Sun’s huge investment in the Liquity platform has proved the effectiveness of this strategy.
Main chain native
CLP always emphasizes "Native and Stable". Even though the scale of USDT, USDC, and DAI is already large, the ICP ecosystem has not yet issued a strong stablecoin on this chain, which provides CLP with an excellent market opportunity.
Although CLP may cross-chain to other public chain ecosystems in the future, it currently has unique advantages in developing in the ICP ecosystem and can fully utilize the technical characteristics and user base of the ICP chain.
ICP official interaction
Since its emergence in the market in April, CLP has participated in several AMAs organized by ICP officials and core ecological projects, and quickly obtained ICP's Developer Grant. DFINITYDev also made a public announcement about the project.
This positive interaction and official recognition demonstrates the important position of CLP in the ICP ecosystem and helps the project to proceed smoothly at all stages.
We noticed that CLP published a post about the size of the stablecoin market. DefiLlama data showed that the latest stablecoin market size has exceeded 170 billion US dollars, and this is still in the first half of this bull market. DefiLlama has not even included statistical data on the ICP ecosystem.
Judging from the ecological list on the ICP official website, there are already three projects related to stablecoins, but only Gold DAO has data and its value does not exceed 100 million US dollars. In the next stage when the bull market continues to ferment, the prospects of stablecoins in the ICP ecosystem can be fully imagined.
Advice to CLPs
Introducing Mining as Ballast
An important point about stablecoins is trust. The basic currencies pledged by users, such as ICP and BTC, are the "ballast" of the platform. The founder of CLP has had mining experience and has maintained good contact with the miner group, which provides good conditions for CLP to attract miners to pledge. This is not only an opportunity for the CLP project, but also an opportunity for the ICP ecosystem to increase the overall TVL.
Interaction with popular ecosystems
It is recommended that CLP communicate with various popular applications in the ICP ecosystem and strive to use CUSD as a supported stablecoin. At the same time, use the market share of CLQT tokens to help promote CUSD, so that CLP's dual-token model will show a double-helix growth situation.
Introducing more incentive mechanisms
In order to attract more users and maintain activity, CLP can consider introducing more incentive mechanisms. For example, by providing early user rewards, transaction fee discounts and Bug Bounty rewards, it can attract new users to actively participate and encourage existing users to increase their participation. These incentives can increase the attractiveness of the platform, enhance user stickiness, and thus promote the long-term development of the platform.
The above is our interpretation and analysis of the CLP project. CLP has unique advantages and huge development potential in the ICP ecosystem. We hope that CLP can achieve greater success in future development and become an important member of the ICP ecosystem.
Related Links
Official website:
clp.finance
X：
@CLPFinance721
Github：
github.com/CLPFinance
Gitbook：
clpfinance.gitbook.io/clp-finance
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