With liquidity drying up in the wake of CeFi contagion, borrowers are turning to decentralized finance for their credit needs.
Netherlands-based crypto investment firm Maven 11 has launched its third lending pool on Maple Finance, giving borrowers access to liquidity amid the bear market.
The $40 million pool financed by institutional lenders will be utilized by trading firms that include Wintermute, Auros and Flow Traders, among others, Maven 11 announced this week. The new pool is designed “specifically for institutions looking for yield opportunities,” the company said.
Maple, a decentralized finance credit platform, is filling a void left by the implosion of leading centralized finance (CeFi) companies such as Celsius. Liquidity constraints triggered by the collapse of Terra (Luna) — now renamed Terra Classic (LUNC) — and its resulting contagion effects have led borrowers to seek out new credit opportunities from within DeFi.
Since launching in 2021, Maple Finance claims to have issued more than $1.5 billion in cumulative loans, with total deposits exceeding $635 million at the time of writing. The protocol currently has over $58 million in total value locked, or TVL, according to DefiLlama. The vast majority of TVL comes from Ethereum, though Maple did expand to Solana in April of this year.
Maven 11 operates a successful venture arm, having raised $160 million in cumulative funding in 2021 to back up-and-coming projects across the DeFi and Web3 industries.
Some prominent voices from within the crypto industry believe DeFi’s push for mass adoption will be aided by institutions. At the Blockchain Futurist Conference in Toronto on Wednesday, Ripple Labs executive Boris Alergant said the DeFi industry still needs to create the next “killer app” to appeal to the masses. Institutions will play an important role by offering exposure to DeFi services.
Editor’s note: Lending pool amount was updated to $40 million from the previously reported $30 million.