# \[IIP-26\] Clearpool PYTs as a new yield source for BY - Wintermute **URL:** \ **Category:** ⛓ IIPs\ **Created:** [September 16, 2022, 3:18pm UTC](https://gov.pareto.credit/t/iip-26-clearpool-pyts-as-a-new-yield-source-for-by-wintermute/1057 "2022-09-16T15:18:20Z")\ **Posts on this page:** 1\ **Showing post:** 1
**Author:** ![emixprime](https://yyz1.discourse-cdn.com/flex031/user_avatar/gov.pareto.credit/emixprime/32/710_2.png) [@emixprime](https://gov.pareto.credit/u/emixprime)\ **Post date:** [September 16, 2022, 3:18pm UTC](https://gov.pareto.credit/t/iip-26-clearpool-pyts-as-a-new-yield-source-for-by-wintermute/1057/1 "2022-09-16T15:18:20Z")
### Authors Treasury League and Development League ### Summary This proposal focus on one initiative: - [Clearpool PYTs as a new yield source for BY](https://gov.pareto.credit/t/clearpool-pyts-as-a-new-yield-source-for-by/1056/4) ## Rationale For a comprehensive analysis of the initiative, we suggest visiting the dedicated governance forum post linked below. Clearpool PYTs as a new yield source for BY → [Forum post](https://gov.pareto.credit/t/clearpool-pyts-as-a-new-yield-source-for-by/1056/4) > [@Clearpool PYTs as a new yield source for BY - Wintermute](https://gov.pareto.credit/t/clearpool-pyts-as-a-new-yield-source-for-by-wintermute/1056/1): > > […] today we would like to discuss the first new yield source integration to the Best Yield strategy: > > - [Clearpool USDC (Wintermute) PYTs](https://app.idle.finance/#/tranches/clearpool/USDC), with specs available on GitHub [here](https://github.com/Idle-Finance/best-yield-PYT-strategy/blob/master/src/Contract.sol) > > By integrating Clearpool USDC (Senior) tranches as a new yield source for the USDC BY strategy, we can create a two-side benefit for the Idle protocol: > > 1. The USDC BY strategy can add a new yield source, besides the usual Aave and Compound, able to offer an average APY in the 5% to 10% range.Currently, [Aave](https://app.aave.com/reserve-overview/?underlyingAsset=0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48&marketName=proto_mainnet) and [Compound](https://compound.finance/markets/USDC) offer APYs lower than 1%. This significant increase in yield can benefit current BY LPs and attract new users to the protocol. > > 2. The USDC BY funds flowing to the Senior side of Clearpool PYTs can create a stable source of funding for the Senior tranches and consequently incentive new Junior liquidity deployments thanks to the boosted APYs available (with an expected average APY in the range of 10% to 20%). > > [Perpetual Yield Tranches](https://docs.idle.finance/products/perpetual-yield-tranches) are live since [December 2021](https://medium.com/idle-finance/make-yield-your-own-perpetual-yield-tranches-are-live-2aef53c153d6) holding a cumulative TVL of up to $50m. [Clearpool (Wintermute) pool](https://app.clearpool.finance/pool/0xCb288b6d30738db7E3998159d192615769794B5b?market=mainnet) is open since May 2022 and it has been part of the PYTs offering since [July 2022](https://medium.com/idle-finance/the-rise-of-risk-hedging-uncollateralized-loans-clearpool-pyts-36d92b343c47). The USDC Wintermute pool has a size of $18m with an average utilization rate of 85%. Wintermute has a borrowing capacity on Clearpool of up to $760m. In the proposal discussion post, we also highlighted some key mechanisms implemented by Clearpool to incentivize the utilization rate of the pools and protect lenders in case of risk of borrower default. > [@Clearpool PYTs as a new yield source for BY - Wintermute](https://gov.pareto.credit/t/clearpool-pyts-as-a-new-yield-source-for-by-wintermute/1056/1): > > ### Clearpool details > > Clearpool developed an [interest curve mechanism](https://medium.com/clearpool-finance/new-interest-curve-mechanism-9a1a5191977f) that encourages borrowers to optimally utilize liquidity in their pools while increasing lenders’ compensations. > > ![image](https://canada1.discourse-cdn.com/flex031/uploads/idle/original/1X/f012ab2529a1346440f8857c5e2aad4dade9ffbd.png) > > Clearpool’s smart contracts have been developed to incorporate a number of [safety measures](https://docs.clearpool.finance/clearpool/how-it-works/protocol/default) which protect both borrowers and lenders during black swan events. Clearpool’s pools have a default mechanism based on each pool utilization rate which forces borrowers to repay loans if the pool’s utilization rate is too high. ### Specifications The code for the IIP-26 can be found [here](https://github.com/Idle-Finance/idle-proposals/blob/iip-26-add-clearpool-senior-idleUSDC/scripts/iip-26.ts). IIP-26 actions: - Add Senior tranche of cpWIN-USDC PYT as a new yield source for idleUSDC Best Yield strategy Together with the above action, IIP-26 will set a new wrapper contract for the Clearpool USDC pool: `0xdb1b149177b5819cf467ad6519cf55416789300a` ### Next Step We will open the on-chain voting phase right after the publication of this IIP. --- _[View the full topic](https://gov.pareto.credit/t/iip-26-clearpool-pyts-as-a-new-yield-source-for-by-wintermute/1057)._