Maple Finance: Institutional Lending

Maple v1: The Genesis

Maple Finance was established in 2019 by Sidney Powell and Joe Flanagan, both coming from TradFi backgrounds. Their vision emerged during the nascent stages of DeFi, a period when the total crypto TVL remained under $100 million. Maple was initially conceived as a fixed-rate crypto-bond marketplace integrated with MakerDAO, allowing issuers to lock yield-bearing cDAI as collateral for hedging interest rate fluctuations. In 2020 Maple took an important early step and originated the first undercollateralized loan to a DAO, lending 15,000 DAI to BrightID, signaling a strategic pivot towards credit-based lending.

This move occurred against a backdrop of significant market dynamics. In 2021, US corporations issued approximately $10.7 trillion in debt, while unsecured bonds and notes constituted the majority of these loans with $7.4 trillion (69%). Concurrently, DeFi lending experienced its own renaissance, reaching a TVL of $30 billion in early 2021. However, the entire DeFi lending segment was predicated on overcollateralization. While CeFi platforms did engage in unsecured crypto lending, reaching a peak of $34.8 billion in outstanding loans, this market was highly concentrated, with Genesis, BlockFi, and Celsius collectively dominating with 76% market share..

Source: Galaxy Research State of Lending

Recognizing the substantial TAM and the distinct opportunity for a DeFi-native protocol in the undercollateralized lending space, Maple Finance was strategically positioned to leverage its early experience with a credit-based undercollateralized loan system developed as early as 2020.

To capitalize on this, Maple secured initial funding in 2021. A March seed round raised $1.4 million from prominent VCs including Polychain Capital, Framework Ventures, Nascent, and Robot Ventures. This was swiftly followed in April by a public round via a Balancer LBP. The LBP, a Dutch auction starting at an initial price of $50 and decaying linearly to $3, ultimately settled at a VWAP of $20.6. This round successfully raised $10.3 million, implying an FDV of $206 million based on public demand.