Maple Finance Brings TradFi to DeFi With Treasury Management Pool
Interested lenders must pass a 15-minute know-your-customer and anti-money laundering onboarding process
Nik Waller Productions/Shutterstock modified by Blockworks
Maple Finance, an on-chain lending and borrowing network, has announced the introduction of a treasury management solution designed specifically for DAO treasuries.
Short-term Treasury yields have steadily increased over the past few years, currently sitting at roughly 5%. By contrast, DeFi yields have stayed relatively low, Maple Finance CEO Sid Powell told Blockworks in an interview.
The latest pool launched by Maple intends to ensure that deposited funds are sent to a special-purpose vehicle (SPV) which is only permitted to buy US Treasurys.
“Funds are off-ramped through Coinbase Prime, it will purchase treasuries from a regulated broker and then pledge them as collateral,” Powell said.
To certify that lender funds are secure, the platform places a tri-party agreement between the Maple Foundation, the borrower and the broker into effect.
Should a borrower refuse to repay their loan, the Maple Foundation will contact the broker and declare the loan in default. By doing this, they gain access to the brokerage account and its T-bills so that it can send the money on-chain to repay the loan.
“So if you’re depositor in the pool, you’ve got a loan paying you about 4% and if that borrower of the loan defaults, Maple can sell and repossess these treasuries from the broker, sell them and pay back your loan…so overall it makes for a relatively low-risk proposition,” Powell said.
Maple Finance said it will open the pool treasury to all non-US accredited investors. Those who wish to deposit loans must pass a 15-minute know-your-customer and anti-money laundering onboarding process.
“We’re going to check: Are you a foundation, do you have articles of incorporation as a foundation, can you disclose your members or board or directors?” he confirmed.
Powell noted that there will also be stipulations on what SPVs can do with borrowed loans.
“We’re not going to buy 10-year T-bills because nobody wants a repeat of Silicon Valley Bank. Instead, we’re just going to buy one or two-month T-bills,” he said.
Lenders will also be able to monitor any treasury holdings that are secured with a custodian in real time. The company acknowledged that next-day withdrawals will also be possible.
Get the news in your inbox. Explore Blockworks newsletters:
- Blockworks Daily: Unpacking crypto and the markets.
- Empire: Crypto news and analysis to start your day.
- Forward Guidance: The intersection of crypto, macro and policy.
- 0xResearch: Alpha directly in your inbox.
- Lightspeed: All things Solana.
- The Drop: Apps, games, memes and more.
- Supply Shock: Bitcoin, bitcoin, bitcoin.
