MAJR DAO Report: Maple Finance
Under-collateralized loans for institutional borrowers
BRIEF
Maple is a decentralized corporate debt marketplace - Borrowing & Lending - DeFi.
Grants institutions access to quick liquidity and capital by providing capital and under-collateralized loans efficiently using asset pools.
Focus is to grow the space with functioning credit markets for crypto organizations, protocols, builders with solid reputation, balance sheets and positive cash flows.
Different than other lending protocols like Compound and Aave which require over-collateralized loans (borrowers don’t have to post >100% of their debt as collateral).
Investors or individuals can access stable underlying yield that is generated from these crypto businesses taking out loans by supplying the underlying liquidity.
Early stage project - mid-size market cap of ~$290 million.
Token (MPL)
Price: $59.26
MPL has 4 core functions:
Governance: Enables holders to participate in governance via the DAO, such as fee levels and treasury management.
Fees: Holders share in fee revenues by depositing Balancer Pool Tokens (‘BPTs’) into a pool of their choice, providing a credit-risk buffer for LPs. In turn, holders earn 10% of the interest from pools when MPL is staked.
Staking: MPL is staked by holders to provide a reserve of capital to a liquidity pool of their choice, in exchange for yield.
Rewards: Liquidity mining rewards paid in MPL.
MPL Distribution: Treasury (14%) - Seed investors (26%) - Public auction (5%) - Liquidity mining (30%) - Team and advisors (25%).
Team
Strong team with industry related expertise.
Strong investors - Alameda Research, FBG Venture, One Block Capital, The LAO, Bitscale Capital, Kain Warwick and Stani Kulechov.
Pros
Total locked Value has been increasing and currently sits at $64.89 million (76th overall for Ethereum dApps).
Treasury is up 100% from $1.1 million to $2.2 million in the last 4 months.
Provides product market fit as over-collateralization has been dominant in crypto and for good reason - crypto is high risk and thin markets.
The Maple treasury receives 50% of establishment fees paid by borrowers.
Mid-market cap coins in DeFi with room to the upside - fully diluted market cap is $584 million.
Across a wide range of exchanges - Gemini, Coinbase, Uniswap.
Cons
Under-collateralized loans present high risk high reward for token holders and lenders in crypto.
180-day lock-up imposed on USDC deposits is a big commitment.
Default risk is higher due to under-collateralization and even higher in the event of a severe bear market, which may be around the corner.
Has already seen a ~6x run up since Jan’22. Up 20% last two weeks, currently trading sideways at time of writing.
Sources:
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