Quick Summary
- Celsius will give and handle loans from a pool of $30 million in WETH using Maple’s DeFi technology. This partnership will support the growth of the crypto market.
The capital pool provides traditional firms and institutions with better access to finance as they seek to capitalize on growing possibilities in the DeFi space. Celsius, a cryptocurrency lending platform, is dabbling in DeFi by becoming the first centralized financial institution to provide its capital marketplace, Maple Finance services.
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Maple Finance x Celsius
Celsius will give and handle under-collateralized loans as a proxy from a pool of $30 million in Wrapped Ethereum (WETH) using Maple’s DeFi (decentralized finance) technology. Wrapped tokens are cryptos from other blockchains with the same value as the original. In exchange for a fee, pool delegates at Maple monitor lending pools and assess applicants.
“Institutions interact directly with the Celsius team to borrow from this pool. Borrowers must go through Celsius’ established KYC and credit checks,” Sydney Powell adds.
“In this case, digital asset institutions Wintermute and Amber have previously done business on Maple and established an on-chain credit reputation, as well as signed a Master Loan Agreement (MLA).” Because of this, as well as Celsius’ established protocols, onboarding has been expedited for all stakeholders”.
About Syndicated Loan
The original $47.25 million syndicated loan issued to Alameda Research in mid-November 2021 has now topped $100 million, according to Maple Finance, with the FTX-affiliated trading business the lone borrower in the deal.
The word “syndicated loan” refers to the procedure through which financial institutions, primarily from the banking industry, offer money to private firms on an individual or consortium basis. The money provided to these organizations is treated as a loan and, as such, is subject to inflationary repayment schemes based on the case complexity and risk assessment.
Over the past few years, several prominent banking institutions have participated in blockchain-centric syndicated loans — and, more recently, decentralized finance (DeFi) — including BNP Paribas and ING, which were two of seven major banks to collaborate with R3 and Finastra in October 2017, and BBVA, which implemented a distributed ledger technology model in the same year with British news agency Finextra.
The Hype of WETH Lending Pool
The DeFi protocol says that its pool delegate concept is “unique” since it allows enterprises and credit funds to utilize its rails to function as lenders in the embryonic DeFi industry.
“We can move swiftly and safely into this market because of Maple’s financing infrastructure,” said Celsius CEO Alex Mashinsky.
Celsius will draw on its extensive underwriting knowledge and looks forward to welcoming new borrowers this year and beyond.
Conclusion
According to statistics from provider DeFi Llama, more than $760 million in crypto loans have originated on the protocol since its introduction in May 2021, with over $650 million in total value locked. Maple stated that it intends to meet a $5 billion loan volume target by the end of the year by meeting client demand and exploring new markets.
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sources: blockworks, cointelegraph
author: Rene Remsik, Hafiz Awaiw
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
