Maple Finance – an institutional capital marketplace for digital assets – has partnered with fintech investment firm Alameda Research to launch Defi’s first syndicated loan. Alameda will use Maple Finance’s new development to provide loans to accredited non-US institutions through a single-borrower DeFi lending pool.
Decentralized Syndicated Loans
Alameda is to operate as the sole borrower of the pool, leveraging its high profile to score better pricing on loans. Lenders to this specific pool include CoinShares, Abra, and Ascendex. They have committed $25 million upon launch, with a growth plan to reach $1 billion over a year. Two other unnamed institutional investors have also provided capital to the loan, but all are AML / KYC qualified.
For the uninitiated, a syndicated loan is a single-borrower loan from a group of multiple lenders. These loans are typically billions of dollars in value and thus are spread among multiple institutions to mitigate risk. Lenders are usually banks, and borrowers could be corporations or governments.
Maple Finance specializes in providing uncollateralized lending services for these high-grade, high-volume trades. Their new product provides one more piece of infrastructure to help companies borrow money and expand.
“What’s really important about it is that it provides firms with a way of directly accessing capital markets and institutional investors so that they can raise debt for themselves,” said Maple Finance CEO Sid Powell. “This is completely different to the way things have been done before. In a way, you could think of it as a kind of on-chain crypto SPAC [special purpose acquisition vehicle].”
Powell said that the new loans are paying fixed interest rates within the 8-10% range. Unlike other crypto-lending services, the loan is also undercollateralized, relying on the strength of Alameda’s reputation to pay it back.
Alameda has not only borrowed but invested in the crypto industry to build infrastructure. Last year, the company invested $3.9 million into a software innovation company tackling risk in the Defi space.
Alameda was founded by FTX CEO Sam Bankman-Fried in 2017 and has acquired over $36.7 billion USDT.