Maple Finance delivers version 2.0 after a $36 million platform default
A week after a $36 million default on the platform, Maple Finance published version 2.0.
Uncollateralized lender Maple Finance has changed its protocol to version 2.0 in an effort to attract a broader spectrum of institutional borrowers, including those from outside the cryptocurrency sector.
With the latest version, dubbed Maple 2.0, the team seeks to mitigate the sector concentration concerns connected with its services. Currently, the majority of loan activity on Maple includes crypto businesses and market makers in the digital assets area, exposing the protocol to contagion risk from the aftermath of the FTX exchange’s failure, according to Maple.
Maple Finance is a decentralized system that allows verifiable businesses to get loans without collateral. The company’s operations diverge from conventional crypto lending systems like Aave, in which each loan is backed by excessive collateral. In addition, Maple does not assume credit risk on its own, since it just supplies the lending infrastructure and other qualifying organizations, known as “Maple delegates,” supply loan pools.
Anyone may contribute cash to Maple’s pools and receive interest; it is up to the delegates to determine a borrower’s trustworthiness. M11, a representative, experienced a $36 million default from the crypto business Orthogonal Trading last week. Orthogonal Trading had borrowed from M11’s Maple pool. Orthogonal said that its money was entangled on the defunct exchange FTX.
The Orthogonal default has prompted concern among crypto industry participants over the feasibility of unsecured financing.
Sidney Powell, CEO and co-founder of Maple, said “Maple is designed to attract institutional borrowers and lenders.” Apple does not put up a large amount of collateral to borrow from a bank, but this is how most corporate financing works.