Blockchain-based credit marketplace Maple Finance unveiled on Wednesday a liquidity pool of trade receivables, the protocol’s first step in a new strategy to bring traditional financial investments onto the blockchain.
Qualifying firms pledge their receivables as collateral to the loans, and investors in the liquidity pool will earn a return once the IRS transfers the credit.
The target yield of the liquidity pool is 10% annualized, with a minimum investment of $500,000 in USDC and 45-day lockup period. The pool will be open for accredited investors such as institutional asset managers and decentralized autonomous organization (DAO) treasuries, who must comply with know-your customer (KYC) and anti-money laundering checks.
The pool can scale up to $100 million and AQRU will consider lowering the entry barrier once it reaches a certain size.
Maple provides the blockchain-based technology to set up and maintain the pools. London-based public company AQRU will manage the pool – the so-called pool delegate – overseeing applying firms and managing the loan book. The loan originator of the pool is Intero Capital Solutions, a financial firm specialized in receivables financing, who will use funds borrowed from the pool to lend to qualified companies in its network.
The new pool indicates that Maple is moving away from uncollateralized crypto lending to crypto trading firms, which resulted in $52 million in bad debt on the protocol and up to 80% losses for select liquidity providers. Those losses came after FTX’s spectacular collapse toppled some of the platform’s largest borrowers.
“Receivables financing is one of the oldest commercial finance products,” and AQRU hopes to get a “first mover advantage” by bringing this traditional investment strategy to crypto investors who are seeking conservative investments to earn a yield, Phil Blows, chief executive of AQRU, told CoinDesk in an interview.
Last month, Maple unveiled a major overhaul of its protocol, winding down most of its active lending pools.
Real-world assets in crypto
Maple co-founder and CEO Sidney Powell said the AQRU-managed pool is the first of a slew of upcoming pools with yield-generating strategies adopted from traditional finance. Maple will soon unveil pools that invest in U.S. Treasury bonds and insurance refinancing, according to the protocol’s representative.
These new pools come as crypto and traditional capital markets are increasingly getting commingled on decentralized finance (DeFi) platforms that tokenize real-world assets (RWA) on the blockchain.
Earlier this month, DeFi protocol Ondo Finance announced tokenized funds for U.S. Treasurys and high-yield corporate credits offered to institutional investors.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.