• Maple Finance offers syndicated loans to Alameda Research as part of DeFi’s institutionalization

  • Maple Finance, a DeFi platform, has created another permissioned lending pool to make it easier for institutional investors to lend money.

    This lending pool has only one borrower: Alameda Research, which has agreed to borrow $25 million from the pool, with plans to increase that amount to $1 billion within a year. The pool will be visible today, but it will not be operational until Friday.

    Within this pool, only certain accredited non-US institutions are permitted to lend funds. Initially, CoinShares, Abra, and Ascendex will be involved. Prior to entering the pool, these participants must go through KYC and AML procedures.

    A syndicated loan is one in which several financial institutions lend money to a single borrower. This is a first for Maple Finance, which typically has multiple parties on both the borrowing and lending sides of the equation.

    What exactly is Maple Finance?

    Maple Finance is an example of a permissioned DeFi platform.

    The central concept is to take DeFi and its ability to allow parties to lend and borrow from one another and add due diligence requirements. This strategy is intended to allow institutions with stringent compliance requirements to participate.

    “Institutional interest in participating in defi is growing.” “They want to get a yield but don’t know how to do it in a compliant way and don’t trust existing protocols,” said Maple Finance co-founder Sid Powell.

    So far, it has been effective. The total liquidity in all of its pools has now surpassed $300 million. This, however, represents only a small portion of the permissionless DeFi lending market, in which 32 platforms manage $52 billion in funds.

    Maple Finance began with two borrowing and lending pools in which anyone can make a loan, but only to a select group of businesses that have passed financial due diligence and KYC procedures. These loans are typically undercollateralized because they are made to established market makers like Wintermute, Alameda Research, and Amber Group. Borrowing rates range between 8 and 12 percent, with fees taking up to 20% of the interest.

    The two pools are identical, but they are managed by separate pool delegates. These are the organizations that perform financial due diligence and whitelist borrowers. Orthogonal Trading manages one pool, while Maven 11 Capital manages the other. These delegates receive half of the fees, with the remainder going to a staking reserve, which can be used if a borrower defaults on a loan.

    Maple Finance launched its first permissioned pool in November, requiring both borrowers and lenders to go through KYC procedures. This is done in collaboration with BlockTower Capital and Genesis Trading.

    This new pool with Alameda goes a step further by limiting the borrowing side to only one borrower, Alameda. According to Maple Finance, this could lead to more competitive pricing and volume.

    “Over the last few years, the crypto trading landscape has evolved very quickly, and we expect it to continue to do so.” “The flexibility provided by a decentralized, on-chain lending platform like this one helps Alameda adapt to that landscape, and we look forward to seeing it grow,” said Sam Trabucco, co-CEO of Alameda Research.

    The platform’s services continue to avoid the United States. “All of our borrowers are borrowing out of non-US entities,” Powell told The Block. Predominantly the United Kingdom, Hong Kong, Singapore, the British Virgin Islands, and the Cayman Islands.”

    While permissioned DeFi lending is still in its early stages, competition is heating up. Aave, a DeFi lending protocol that manages $14.5 billion in cryptocurrency, is about to launch its own permissioned lending platform, Aave Arc.

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