Crypto lending system Maple Finance shifts away from uncollateralized lending toward offering yield-generating real-world assets to crypto investors following defaults and a significant revamp.
Wednesday saw the launch of a new liquidity pool of trade receivables by blockchain-based credit marketplace Maple Finance. This was the protocol’s first step in a new plan to move conventional financial investments on the blockchain.
The Internal Revenue Service (IRS), the U.S. federal tax authority, will be able to provide businesses with cash loans with a discount on their tax rebates and supporting programs like Employee Retention Credit (ERC) through the new USDC stablecoin pool.
When the IRS transfers the credit, investors in the liquidity pool will receive a return on their investment. Qualifying businesses pledge their receivables as security for the loans.
The liquidity pool’s objective yield is 10% annually, with a $500,000 USDC minimum investment and a 45-day lock-up period.
Accredited investors, such as institutional asset managers and DAO treasuries, who must pass know-your-customer (KYC) and anti-money laundering checks, will have access to the pool.
Once the pool reaches a particular size — up to $100 million — AQRU will think about decreasing the entry threshold.
The blockchain-based technology needed to set up and run the pools is provided by Maple.
The so-called pool delegate, a publicly traded business with its headquarters in London named AQRU, will monitor the enterprises that apply and handle the loan book for the pool.
Intero Capital Solutions, a financial institution that specializes in receivables financing, is the loan originator of the pool and will utilize the money it borrows from the pool to provide loans to deserving businesses in its network.
The new pool shows that Maple is shifting away from lending uncollateralized cryptocurrency to crypto trading companies, which cost the protocol $52 million in bad debt and caused up to 80% losses for some liquidity providers.
These losses occurred after some of the major borrowers on the platform were ousted by FTX’s stunning collapse.
According to Phil Blows, chief executive of AQRU, “Receivables financing is one of the oldest commercial finance products,” and by offering this tried-and-true investment strategy to cryptocurrency investors looking for conservative investments to earn a yield, AQRU hopes to gain a “first-mover advantage.”
In September, Maple introduced a credit pool aimed at struggling bitcoin miners as the crypto could put pressure on the industry and made raising funds challenging.
The pool has not yet created a loan of its own.
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Maple Finance Planned Return With New $100M Tax Receivables Liquidity Pool With 10% Yield was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.
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