Maple Finance and Celsius have teamed up to develop a wETH lending pool.

Maple Finance and Celsius have teamed up

Celsius, a digital asset lending platform, has become the first pool delegate from the centralized finance market to launch a crypto-centric lending service on Maple Finance, leveraging the latter’s smart contract and blockchain infrastructure to help institutional investors access a $30 million pool. In joining with Maple, Celsius succeeds current pool delegates BlockTower, Orthogonal Trading, Maven 11 and Alameda Research. Wrapped Ether (wETH) will be added to the existing ability to trade Circle’s native stablecoin, USD Coin (USDC), allowing investors to use the asset across a variety of trading components, such as staking, lending, and borrowing. Cointelegraph spoke to Sidney Powell, Maple Finance’s co-founder and CEO, to uncover the prerequisites and financial nuances that interested institutional investors must be aware of before engaging with the pool. Powell shared that “Institutions work directly with the Celsius team to borrow from this pool. Borrowers have to pass through Celsius’ established KYC and credit assessments,” adding: “In this instance, digital asset institutions Wintermute and Amber have already been doing business on Maple, so have an on-chain credit reputation, and signed a Master Loan Agreement (MLA) too. This, plus Celsius’ established processes, means onboarding has been streamlined for all parties.” The first syndicated loan of $47.25 million provided to Alameda Research in mid-November 2021 has now exceeded $100 million, according to Maple Finance, with the FTX-affiliated trading firm being the lone borrower in the deal. Abra put up $25 million alongside other initiatives including Zed Run, a popular play-to-earn horse racing game, and CoinShares, among others.“ Syndicated loan” is a term that denotes the process by which financial institutions, typically from the banking industry, extend finance to private corporations, either on an individual basis or as part of a consortium. The capital afforded to these corporations is viewed in the form of a loan and, as such, is subject to inflationary payback schemes dependent on the case complexity and evaluated risk .Over the past few years, a number of prominent banking institutions have participated in blockchain-centric syndicated loans — more recently also traversing over to decentralized finance (DeFi) — including BNP Paribas and ING, which were two of seven major banks to partner with R3 and Finastra in October 2017, and BBVA, which implemented a distributed ledger technology model with British news agency Finextra the following year. Maple has developed rapidly since its launch nine months ago, with $768 million in loans generated and $649 million in total value locked at the time of writing. It plans to reach $5 billion in TVL by the end of the year, as well as $1 billion in loans inside the Alameda pool during the same time period. Powell commented on the necessary due diligence that traditional firms should consider and complete before engaging with the DeFi space: “Maple was built to disrupt the banking infrastructure that I had to work with within traditional finance. But when it comes to due diligence, the same rules apply!” He added that asset managers at traditional firms have all the equipment necessary in the DeFi space, “just faster and more efficiently because the information is on-chain information and immutable.”

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