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Lending platform Web3 Maple Finance has announced the launch of a direct lending program, according to a June 28 newsletter from the platform’s development team. The program is intended to replace the services previously provided by Celsius, BlockFi and other bankrupts.
The company said the first credit pool will be available sometime in July.
Introducing Maple Direct, the new lending arm of Maple Finance.
With the formation of Maple Direct, Web3 now has a specialist digital native lender and launches to meet the growing institutional demand for a trusted direct lending desk in Web3.https://t.co/Q4jfnABk3R
— Maple (@maplefinance) June 28, 2023
Maple Finance is an institutional blockchain capital market. It is used by Web3 businesses to obtain loans, allowing them to fund a product launch or expansion. In the past, Maple relied on loan officers, called “pool delegates”, to provide capital for these loans. For example, Celsius used Maple to create a Wrapped Ether (WETH) credit pool in February 2022.
But in the mid-to-late 2022 bear market, some of Web3’s biggest lenders went bankrupt. Celsius closed in July, BlockFi went bankrupt in November, and Genesis filed for bankruptcy in January.
In the June 28 announcement, the Maple team stated that it will now act as a lender on the platform in some cases. Using his own credit underwriting experience, he will provide capital from institutional allocators to creditworthy borrowers. This means that if a potential borrower is unable to obtain loans from one of the other providers, they can obtain them from Maple through the Maple Direct program.
Related: Celsius aims to convert alts to bitcoin and ether as part of reorganization plan
According to the Maple team, this new program is needed because large Web3 lenders have “gone out of the space” and traditional lenders such as banks “do not have the focus or expertise to warrant an innovative group” of Web3 technology companies.
The team said it will launch its first direct lending pool sometime in July, which will focus on lending to “infrastructure, asset management [и] liquidity providers. The team suggested that capital allocators earn income through the program, saying it fits the needs of “cryptocurrency funds, DAOs, venture capitalists, HNWIs, yield aggregators [и] family offices” who are looking for a return on their investment.
Maple will also “continue to expand its existing services,” the announcement said, implying that Maple Direct will not replace the current platform that features competing lenders.
Maple Finance’s lenders were hit by the FTX and Alameda Research bankruptcies in November. Borrower Aurus Global missed one of its payments as a result of these events, and Maple also cut ties with borrower Orthogonal Trading due to what it saw as a misrepresentation. But the platform quickly bounced back, launching version 2.0 of its software in December.