GemCoin Spotlight: Maple (Real World Assets)

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3 Feb 2024

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In today's review, we take an in-depth look at Maple a remarkable project at the intersection of DeFi and Real World Assets (RWA).

We'll explore how Maple's credit experts are reshaping lending with Real-World Assets.

Let's start it!

Overview

Maple is a pioneering blockchain-based institutional capital marketplace that empowers lending experts known as "pool delegates" to rigorously assess creditworthiness, establish loan terms with borrowers, and actively manage loan portfolios.

Initially focused on unsecured lending to crypto-native assets, Maple has increasingly turned to Real World Asset (RWA) based loans and diversified its offerings. While the borrowing and lending process remains standard, Maple's pool delegates now seek to originate loans with real-world asset collateral, such as tax receivables, rather than relying solely on crypto collateral.

This expansion aligns with Maple's mission to offer more diverse lending opportunities across its permissioned liquidity pools and enables Maple LPs to allocate capital and earn MPL interest when participating in both crypto and RWA-backed loans.

Platform and How It Works

Maple involves liquidity providers depositing funds into pools to fund loans and earn returns in the form of LP tokens. Pool Delegates manage the pools, negotiate terms with borrowers and align their interests with liquidity providers by depositing reserves to cover defaults. Borrowers demand capital on specific terms by collateralizing loans. Maple Token ($MPL) holders can earn protocol fees by adding funds to revenue sharing contracts. As a Maple MPL holders gain voting and bidding rights to influence platform changes, such as adding Pool Delegates or adjusting fees and staking parameters. Protocol actors in Maple Finance👇

Pool Delegate

These users manage Maple pools and receive fees for evaluating borrowers and funding loans. They are required to deposit a minimum amount to protect liquidity providers from defaults.

Liquidity Provider (LP)

LPs provide capital to fund loans and earn returns in the form of LP tokens that appreciate in value over time. They select pools based on agent performance, borrower verticals and management fees.

Borrower

Institutions seeking capital negotiate terms with Pool Delegates, collateralize on-chain loans and pay accordingly. Failure results in late fees, potential default, collateral liquidation and legal recourse.

Admin

This governance wallet controls protocol functions, manages the treasury and defines global parameters based on token holder votes.

Security Administrator

A designated account with the authority to emergency pause the protocol in critical situations to prevent harm.

Keepers

External actors incentivized to liquidate within the restrictions defined by the protocol.

Products and Services

Maple is currently running on the Ethereum and Solana networks. And both networks have different pools. As of writing, Maple Finance's TVL is around 65 million dollars. You can be a Borrower or a Lender @maplefinance . To become a Borrower or Lender, you need to fill out a short form and make a certain insurance deposit. Then, after a conversation with a team member, your approval process begins. Once approved, you can borrow or deposit money as a Borrower or Lender on the platform.

Note M11 Credit (permissionless) - WETH and M11 Credit (permissionless) - USDC are permissionless pools. This means that users can lend directly.

Now we will examine the pools created on the platform (Ethereum) 👇

Cash Management Secured lending backed by US Treasury bonds with daily liquidity. Room40 Capital, an institutional crypto hedge fund, established a private SPV within two pools as the sole borrower.

▫️ Maple Direct - USDC
Cash Management helps financial stability, prevents inflation and suits DAOs, treasuries and funds with daily liquidity needs. It holds US Treasury bills and targets an annual net APY minus 0.5% fee at the 1-month rate.

▫️ Maple Direct - USDT
Offers financial stability, inflation hedging and daily liquidity for Cash Management, DAOs, Offshore Companies and Web3 Treasuries and targets 1.0% net APY after fees. Real World Assets (RWA) Secured lending to off-chain originators and corporates.

AQRU - USDC
AQRU is a digital asset investment platform that provides liquidity to US businesses by purchasing their receivables with a focus on US Treasury-backed tax credits. It accepts deposits over 50,000 USDC from accredited investors after KYC verification. Digital Asset Lending Secured and unsecured loans to web3 institutions.

Maple Direct - USDC
Maple Direct's pool provides secured USDC loans backed by digital asset collateral to institutional web3 borrowers. Access is for accredited USDC holders who have completed KYC and AML with Maple.

M11 Credit - USDC
M11 Credit bridges traditional capital markets and blockchain, enabling liquidity providers to access returns and fund profitable businesses that are established. A talented team manages pools to optimize returns and create value.

M11 Credit (permissionless) - WETH
M11 Credit brings traditional markets to the blockchain, connecting liquidity providers with yields and financing established businesses. A talented team manages pools to optimize returns and create value.

M11 Credit (unauthorized) - USDC
M11 Credit leads traditional on-chain markets by offering liquidity, funding and expert yield optimization. USDC is open to all investors with deposits.

Solana Pool 👇

Cash Management

Maple - USDC

Cash Management offers stability, inflation hedging and cash flow management for DAOs, treasuries and fund managers. Accredited Investors can deposit USDC into a bankruptcy remote brokerage account with next day withdrawals, monthly interest statements and asset recourse. The Pool targets a net APY of 0.5% per annum.

xMPL Staking

The staking program, launched in May 2022 for #MPL holders to participate in Maple's growth, is not currently distributing $MPL as revenue does not exceed operating expenses. xMPL remains valuable for voting and depositors can access and redeem their balance at any time via the WebApp.

Tokenomics

Maple relies on the $MPL token for governance and use. MPL holders can actively participate in governance, earn interest fees and use MPL to purchase BPT tokens for the Pool Cap. They can also transfer voting rights for rewards. @maplefinance . With a maximum supply of 10 million tokens, 5% has been distributed through Balancer's pool. #MPL tokens are ERC-20 but switch to ERC-2222 for treasury profit distribution. Future plans include xMPL allowing staking for revenue shares, governance voting, and providing potential unilateral Pool Cap. Currently, 7.9 million $MPL tokens are in circulation, approximately 79% of the total supply.

Distribution 👇

Liquidity Mining - 30%
Seed Investors - 26
Team and Consultants - 25%
Maple Treasury - 14%
Auction - 5%

The auction was conducted via the Liquidity Boot Pool (LBP) on the Balancer and raised $10.3 million from 1080 participants.

Conclusion

PROS

Maple Finance creates a bridge between DeFi and Real World Assets (RWA), expanding lending opportunities.
Strong team of experienced professionals.
Partnerships with reputable companies and platforms.
Strict security measures and successful audits.
Listing on numerous well-known exchanges.

CONS

Despite its promising growth, Maple Finance's revenues have yet to exceed its operating expenses, which is affecting $MPL token distributions.
Some users may find the initial approval process for borrowing or lending on the platform a bit cumbersome.
Previously, unsecured crypto loans to crypto trading firms left Maple with US$52 million in bad debt and losses of up to 80% for some Maple LPs. These losses came after last year's centralized contagion spread to Maple's crypto-native borrowers.

In conclusion, Maple Finance represents an important step towards merging DeFi with Real World Assets (RWA). Its innovative approach expands lending horizons by empowering lending professionals to assess creditworthiness and manage loan portfolios.

#MPL token and governance mechanisms offer users a stake in the decision-making process and a share of the fees. Rigorous security audits prove the platform's safety, while strategic partnerships strengthen its ecosystem. However, revenue challenges need to be addressed for sustainable growth. Maple Finance stands as a promising startup heralding a new era of decentralized lending and financial inclusion.