- The series in this issue will will take to look at the most current developments, news, and trends in the ever-changing decentralized financial (DeFi) sector. We’ll dive into the finer details to understand how the protocols of the DeFi ecosystem operate, as well as the challenges that plague the system and how developers will tackle the challenges.
- The week ahead, we look at Maple Finance, an on-chain capital market based using Ethereum along with Solana. We also look at the performance of the protocol and its outlook for the future.
CeFi protocols such as Celsius and Voyager as well as one of the biggest hedge funds in crypto -Three Arrows Capital Three Arrows Capital (3AC) have been the focus of news in recent years. The financial crisis caused massive deleveraging when institutional and retail investors alike attempted to lower their risk. This naturally caused the use of TVL of the CeFi as well as DeFi loan protocols fall dramatically, and massive losses for lenders and the protocols that loaned money to companies that are now insolvent.
While offering only subcollateralized and unsecure loans, Maple Finance managed to weather the storm of May 2022.
What Is Maple Finance?
It was founded in May 2021. Maple Finance is a capital network based using Ethereum as well as Solana and acts in the capacity of an online lending desk providing only corporate and institutional clients, and has issued over $1.6 billion of loans as of.
Maple is a loan provider that provides loans to the borrowers, while allowing lenders to earn a sustainable return through their the lending pools.
The Maple platform includes five main players: Lenders, Borrowers, Stakers, Cover Providers, and Pool Delegates.
The lender deposits assets into the Lending Pool and earn interest which is denominated in the pool’s liquid asset. For instance, lenders who deposit WETH in the “Maven 11 wETH” pool receive a payout of 5.3 percent APY in wETH. Those who deposit in the “Maven 11 – USDC” pool receive a payout of 9.1 percent APY, denominated in USDC. Lenders receive MPL-LP tokens that represent their portion part of that Lending Pool. In addition the deposit is locked for 90 days with no minimum deposit requirements.
The borrower must undergo an approval procedure before they can get loans. Once they have been approved, borrowers may apply for new loans created through the chain. Pool Delegates must conduct their due diligence prior to granting the funds to draw down with a fixed cost, as well as collateralization.
As previously mentioned the loans available on Maple are able to be secured under collateral or unsecure. The collateral you have posted is released after the completion of the last term’s payment. Borrowers will be liquidated if overstay a grace period of five days after they have missed their first payment.
Stakers are the users who put MPL, the Maple token, into. Stakers earn xMPL when they stake MPL and are able to participate in the governance of the protocol, and receive a portion of the revenue generated by the protocol.
Users can cover Lending Pools by transferring both USDC and MPL (50:50) into the Balancer Pool in exchange for Balancer Pool Tokens (BPTs). BPT can be then staked to the Lending Pool of choice. In this way, the insurance companies offer a reserve for first-loss to their pools of choice.
Take note that The Pool Delegates must put up at least $100,000 of BPT when they establish a pool to encourage proper administration and proper management of their lending pool.
The Pool Delegates manage the operations of Lending Pools and are responsible for attracting and screening potential borrowers while earning fees. They are also accountable for negotiating loan terms , as and liquidating collateral in case the borrower default.
Team and Backers
Maple Finance was founded by Sidney Powell and Joe Flanagan. Powell has worked in the finance and banking industry at the National Australia Bank and worked in the credit risk, capital finance as well as the corporate finance department. Later, he moved to Angle Finance where he worked as the treasurer and portfolio manager. Flanagan began his career with PwC in the role of a consultant prior to transitioning to roles at FinTech firms. Between them, they have been involved in more that $3 billion in corporate bond issues and also run a bond program of $200 million or more. financing program. The other members of the team is available in this article.
In terms of the amount of money raised, Maple has conducted three fundraising rounds:
As of October 10, 2020 Maple completed the $1.3 million seed round with a value of $5 million. It also came with the possibility of unlocking 5% during the Token Genesis Event (TGE) as well as a linear vest of 18 months. The round was attended by Alameda Research, Framework Ventures as well as Aave the founder Stani Kulechov, among others.
On January 20, 2021 Maple has closed its $1.4 million financing round which was led by Framework Ventures and Polychain Capital at a price at $30 million. The round was completed via OTC (OTC) with Treasury tokens and a 12-month linear vest beginning at TGE.
On March 20, 2021 the round was concluded with the purchase of $5000 Strategic OTC from Treasury at $50 million in value with an initial 12-month linear vest that began at TGE.