• The new pool is a DeFi debut for market maker Flow Traders
  • Industry lenders went risk-off in recent months, Maple CEO Sid Powell said

Maple Finance is touting its new $40 million institutional lending pool as a positive sign for the industry in the wake of its recent liquidity crisis.

The pool — led by crypto investment firm Maven 11 — boasts initial borrowers including Wintermute, Flow Traders and Auros, the company revealed Wednesday.

It is the first time Flow Traders, the major Dutch market maker and trading firm, has jumped into DeFi, Maple Finance CEO Sid Powell told Blockworks. 

Maple Finance is a marketplace for crypto capital. It offers undercollateralized lending infrastructure for institutional lenders and corporate borrowers. 

Founded in May 2021, Maple hit $1 billion in loans in its first 10 months. The company has now issued more than $1.5 billion in loans, according to its website. Total deposits are now roughly $600 million. 

Maple aggregates capital on behalf of large borrowers. Rather than a borrower negotiating deals and maintaining contact with a dozen prospective lenders, one entity (in this case Maven 11) assesses the borrower’s risk and manages a collateralized asset pool.

Lenders risk-on again?

Lenders around the industry went risk-off in recent months in response to the market downturn.

Centralized lender Celsius, for example, initiated bankruptcy proceedings last month after suspending withdrawals and transfers in June. A number of others were doomed by its exposure to crypto hedge fund Three Arrows Capital, which filed for Chapter 15 bankruptcy after being ordered into liquidation by a British Virgin Islands court.

Maple Finance CEO Sid Powell
Maple Finance CEO Sid Powell

Still, Powell saw continued interest from borrowers throughout the period. “Over the course of the last few months we were in a kind of holding pattern,” Powell said. “And now that we’ve seen concerns around contagion subside, we were able to pick up the opportunity to start lending again.”

London-headquartered custody startup Qredo will help facilitate the lending pool with Maven 11 — a digital asset investment firm founded in Amsterdam. Qredo will offer a multisig solution to manage blockchain addresses for more security and operational efficiency.

The permissioned pool ensures a regulatory sound process in which institutional lenders must complete know-your-customer and anti-money laundering onboarding. This will be Maven 11’s third lending pool on Maple, as it has two others sized at about $500 million combined. They became the second pool delegate on the DeFi (decentralized finance) platform in July 2021.

“Maven saw no defaults across any of their pools, so they outperformed significantly across all other lenders in the space,” Powell said. “That’s why they are the first cab off the rank to set up this new pool and resume lending again.”

As of the start of June, just one loan default of $10 million had occurred out of Maple’s $900 million in outstanding deposits, according to Powell.

Celsius became the first centralized finance institution to deploy its services on Maple in February, starting with under-collateralized loans from a $30 million pool of wrapped ether (WETH).

In late June, at the worst of the crypto ecosystem’s recent liquidity crunch, Maple noted on its website that “there may be instances where there is insufficient cash in pools, and lenders must wait for borrower repayments.”

Powell said Celsius’ loans were “performing well” and that the company would continue to receive repayments of loans it lent out to borrowers over the next few months.

Maple is corporate finance, on-chain

Blockchains offer operational efficiency to digital asset capital markets such as Maple, which the firm hopes to combine with a user experience that can help it grow beyond crypto natives.

Maple is focused on replicating the $3 trillion corporate finance market, on-chain. Success would see its institutional pool delegates extend loans to fintechs, software-as-a-service (SaaS) companies and businesses in other sectors, all powered by smart contracts. 

The platform had solely operated on Ethereum until April this year, when it expanded to rival network Solana. 

Most of Maple’s collateral is on Ethereum, with just 2% of its total value locked on Solana, per DeFi Llama.

“You say commonly within crypto once you’ve used USDC you never really want to go back to using a bank account,” Powell said. “Well what we want to show is once you’ve either lent into one of these pools or borrowed from one of these pools, you’d never really want to go back and use a bank.”

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  • Ben Strack is a Denver-based reporter covering macro and crypto-native funds, financial advisors, structured products, and the integration of digital assets and decentralized finance (DeFi) into traditional finance. Prior to joining Blockworks, he covered the asset management industry for Fund Intelligence and was a reporter and editor for various local newspapers on Long Island. He graduated from the University of Maryland with a degree in journalism. Contact Ben via email at [email protected]