great article. I think maple is a fantastic product, combining blockchain efficiency with trad-fi credit underwriting. This is a very scalable product since it does not require collateral, unlike aave. the issue here is that they still only service crypto native companies which are embedded with risk..
with the latest defaults, they are on life support. I am watching it closely, as i want to allocate in, but need some indicators that they will survive this. if they do survive, i believe the upside here is huge. What do you think?
Thanks Aryeh. Not investment advice. That said, Maple itself is not a creditor for any loans on the platform that I am aware of. So, the distributed set of lenders have suffered from the recent defaults. The platform suffers if these lenders don't return (or they can't source new lenders). In total, the loan repayment track record is very good with the recent defaults coming from contagion related to 3AC and Alameda. So, their ability to persist comes down to their ability to get lenders to finance future borrowing. They have $8.9m in their treasury. However this is correlated to the token price - so if it continues to get crushed that could be a problem. It's unclear if they have additional funds held off-chain. They are backed by some of the largest crypto VCs, and have shown utility and product/market fit so its possible the VCs will back stop them if it got real bad.
Regarding lending to crypto native firms - this has been the case so far. I expect this to continue and for them to eventually start lending to other sectors such as revenue generating SaaS start-ups. Their CEO has indicated this is part of their roadmap. Definitely some risk here but also potential upside. Hope this helps!
Great Article! A masterclass on how to do fundamental analysis in crypto!
Thanks Pedro! Glad it was helpful.
great article. I think maple is a fantastic product, combining blockchain efficiency with trad-fi credit underwriting. This is a very scalable product since it does not require collateral, unlike aave. the issue here is that they still only service crypto native companies which are embedded with risk..
with the latest defaults, they are on life support. I am watching it closely, as i want to allocate in, but need some indicators that they will survive this. if they do survive, i believe the upside here is huge. What do you think?
Thanks Aryeh. Not investment advice. That said, Maple itself is not a creditor for any loans on the platform that I am aware of. So, the distributed set of lenders have suffered from the recent defaults. The platform suffers if these lenders don't return (or they can't source new lenders). In total, the loan repayment track record is very good with the recent defaults coming from contagion related to 3AC and Alameda. So, their ability to persist comes down to their ability to get lenders to finance future borrowing. They have $8.9m in their treasury. However this is correlated to the token price - so if it continues to get crushed that could be a problem. It's unclear if they have additional funds held off-chain. They are backed by some of the largest crypto VCs, and have shown utility and product/market fit so its possible the VCs will back stop them if it got real bad.
Regarding lending to crypto native firms - this has been the case so far. I expect this to continue and for them to eventually start lending to other sectors such as revenue generating SaaS start-ups. Their CEO has indicated this is part of their roadmap. Definitely some risk here but also potential upside. Hope this helps!