Maple Finance to Launch U.S. Treasury Liquidity Pool

Maple Finance is banking on a trend of real-world assets picking up in the decentralized lending sector.

Lending protocol Maple Finance plans to launch a new liquidity pool that invests in U.S. Treasury bonds. 

Sidney Powell, CEO of Maple Finance, disclosed the decentralized credit market’s plans in a community call on Tuesday, CoinDesk reported.

The pool will allow accredited investors and corporate treasuries outside of the U.S. to invest their stablecoin holdings in U.S. Treasury bonds and earn a yield. 

He also announced a community vote would take place later this year to deliberate new tokenomics and utility for the platform’s native token MPL. The token rallied 23% ahead of the call. 

In December, Maple cut ties with one of its largest clients, Orthogonal Trading, after learning that the firm had “misrepresented its financial position.” Orthogonal had $31 million in loans outstanding on the M11 credit pool when it failed to commence repayments around four weeks before Maple realized the firm was effectively insolvent.

Orthogonal had also claimed that it had little exposure to FTX, which did not turn out to be the case. 

FTX’s implosion led to $36 million worth of credit defaults on M11 and significant losses for 80% of liquidity providers on the platform. However, last week, M11 announced that it was once again up and running and was raising funds for its KYC pool on Maple.

M11 Credit is once again open for lending and we're excited to announce that we're raising funds for our KYC USDC pool on @maplefinance. The borrower will be a highly reputable and creditworthy market-neutral trading firm that we've carefully vetted.

🧵(1/7)

— M11 Credit (@M11Credit) April 5, 2023

The team expects market-neutral trading firms to benefit from opportunities provided by Ethereum’s Shanghai upgrade and ongoing regulatory pressure that would likely lead to more volatility.

“As many CeFi lenders are no longer able to provide (cheap) capital, financing options have become scarce for market-neutral trading firms,” said the M11 team.

“Furthermore, especially USDC became more scarce in the industry as crypto banking issues limit on-ramp options in recent weeks,” they added.