on the crypto
Loan terms are about to improve a lot in decentralized finance (DeFi). "What we are allowing is capital-efficient funding for top institutions with solid balance sheets, strong reputations and strong cash flows, which will enable further growth and adoption of cryptocurrencies globally," said Sidney Powell, co - founder and CEO of Maple Finance.
The terms of Maple Finance
Maple Finance is a new Australian company that operates a platform made primarily of institutional lending tokens. The company closed a $ 1,3 million seed round for its MPL governance token.
The typical DeFi loan currently requires significant over-collateralisation, with users constantly having to ensure that their collateral is reconfirmed as market conditions change.
On Maple, a good company would always have the same rate for the duration of the loan, could access with as little as 40% of the loan value, and the initial collateral would not need to be revisited based on market conditions. "As long as you remain a paying borrower, fulfilling your obligations, there will be no further demands on your collateral," said Joe Flanagan, the other co-founder of Maple.
The first Maple pool
Maple is able to adapt conditions to the reputation and behavior of borrowers. It will only make offers to institutional clients. That said, Flanagan noted, as this market matures and evolves, Maple would certainly be interested in serving crypto-native organizations, such as decentralized autonomous organizations (DAOs) that don't have traditional legal structures.
Maple will be organized by pool, with each pool managed by a “Pool Delegate” making the decisions on the loans in that pool. The pools will specialize in some areas where the delegate has experience, such as a region of the world, a category of borrower or a risk profile. The first pool will be small, to test the model. It will have available loan funds between $ 10 and $ 15 million, with loans between $ 1 and $ 2 million.
Cash extraction
Maple Finance will be a DeFi platform like any other, governed by its MPL token and offering return opportunities for anyone on Ethereum (find out quotation in real time). While he will be more cautious than other DeFi projects, providing liquidity to Maple will be possible for anyone who wants to enter.
This capital will then be used to grant the loans. Additionally, liquidity providers will earn MPL tokens as part of a liquidity mining scheme whose precise terms have not yet been defined.
The total supply of MPL tokens will be set at 10 million, with around 30% being devoted to cash extraction. MPL holders have the opportunity to increase their returns with it staking, but they will also bear the brunt of the losses in the pool in the event of the borrower's insolvency. While Maple's offering is likely attractive to space traders, it will be particularly interesting to see if bitcoin (BTC) miners take advantage of it.
