Reputation-based lending is coming to decentralized finance (DeFi) next month with the release of Maple Finance’s “Pool Delegates” lending suite.
The Australian-based startup is set to debut its first undercollateralized lending market with stable rates in April. Maple Finance closed a $1.4 million funding round led by Framework Ventures and Polychain Capital to help further develop and launch pools, a press release shared with CoinDesk states.
“Long term, we view Maple as the connector of traditional lending for crypto firms writ large,” Framework Ventures co-founder Michael Anderson told CoinDesk in a message. “Lenders want access to firms in the crypto space and borrowers want to work through a platform that understands their business model.”
In short, Maple provides curated loans using asset pools native to the world of DeFi. Pool delegators determine interest rates, loan value and payment terms based on a borrower’s profile – just like in traditional banking.
Each pool will have different criteria, with the first such pool holding $15 million and denominated in stablecoin USD coin (USDC) going live next month. That’s markedly different from other primitives in the $20 billion DeFi lending market, which often only offer overcollateralized loan packages.
Maple said the first pool will consist of “blue-chip borrowers, including prominent market makers and trading funds.” Trading firm Folkvang and market maker Wintermute are two potential first clients, Maple added. Additional pools will be created in other stablecoins, wrapped bitcoin (WBTC) and ether.
“The launch of our first pool will be a significant moment for DeFi, enabling institutions, sophisticated investors and individuals to gain access to a stable, underlying yield that is generated from crypto-focused companies that are profitable and reputable,” Maple Finance co-founder Sid Powell said in a statement.