Abstract

Maple Finance, founded by a team with traditional finance backgrounds, positions itself as an “institutional-grade on-chain capital market.” Over the past three years, it has experienced rapid expansion, risk exposure, and system restructuring.

Initially centered on unsecured loans, the protocol has issued over $2 billion in total loans. However, at the end of 2022, it was severely impacted by borrower defaults, causing TVL to drop sharply. In 2023, the team launched Maple 2.0, enhancing transparency and risk management, and expanding into new business areas such as on-chain government bond investments and real-world asset loans. Currently, the protocol’s TVL has recovered to $58 million, growing more than fourfold in recent months, with the government bond tokenization product reaching $27 million.

To date, Maple has issued over $4 billion in loans. The platform’s total value locked (TVL) exceeds $300 million, with nearly $60 million distributed to liquidity providers. At the time of writing, the fully diluted valuation is approximately $180 million.

Industry Background: On-Chain Lending Demand Post-CeFi Collapse

Lending is a core function of the financial system, and the same applies in the cryptocurrency world. Early lending was primarily dominated by CeFi platforms such as Celsius, BlockFi, and Voyager. These platforms promised high interest rates to attract deposits, then lent the funds to trading firms or used them for their own investments. However, their highly centralized operation models lacked transparency in fund flows, and risk management relied heavily on a few executives’ judgment.

The wave of failures in 2022 exposed the fragility of CeFi. Celsius collapsed amid liquidity crises, BlockFi faced difficulties after FTX’s bankruptcy, and Voyager’s user assets were severely eroded. By year’s end, FTX’s explosive collapse further shook trust across the entire crypto ecosystem. Investors found it nearly impossible to know how their funds were being used on these platforms; their promised yields turned out to be black boxes.

In contrast, DeFi lending protocols driven by smart contracts—such as Aave and Compound—require high collateral but offer full transparency of fund flows, collateral status, and liquidation rules on-chain. This transparency far exceeds that of CeFi. After the CeFi failures, the market urgently needed a lending model that could deliver higher capital efficiency while maintaining transparency. Maple Finance gained attention in this context.

Project Overview: Maple Finance

Founded in 2021 by Sid Powell and Joe Flanagan, Maple Finance is not a retail-focused collateralized lending platform but a decentralized on-chain debt capital market designed for institutions and professional investors. Sid previously worked in debt capital markets and structured finance at National Australia Bank, while Joe has extensive experience in risk modeling and investment. Both founders understand traditional credit operations and recognize that blockchain can bring transparency and efficiency innovations to debt markets.

Maple’s core model is to establish liquidity pools managed by “Pool Delegates”—credit professionals responsible for vetting borrowers. Investors contribute funds to these pools, and borrowers receive financing. Fund flows and contract execution are handled via smart contracts, ensuring transparency while allowing human credit judgment and flexibility.

In terms of funding history, Maple secured $1.3 million in seed funding in 2020, completed a $1.4 million Series A in 2021, and raised an additional $5 million in August 2023 led by BlockTower Capital and Tioga Capital. The team currently comprises about 35 members across capital markets, engineering, and operations, many with traditional finance backgrounds.

Features: Low-Collateral Lending

Maple’s loan pools are managed by Pool Delegates, akin to credit managers or fund managers in traditional finance. Borrowers are mainly institutional participants such as market makers, trading firms, and hedge funds, who undergo rigorous credit assessments including KYC/AML, financial statement analysis, asset-liability review, historical performance, reputation evaluation, and risk management capabilities. Pool Delegates decide loan limits, collateral requirements, and continuously monitor risks.

Unlike traditional on-chain loans, Maple offers partial collateral loans (typically 20–40%), and some high-reputation institutions may even access unsecured credit. The security relies on legal off-chain contracts rather than full on-chain collateral; loan agreements include covenants restricting use of funds, liquidity, and financial ratios, with legal recourse in case of default.

Risk management involves risk-sharing among Pool Delegates and SYRUP/MPL token holders through pledged “first-loss capital.” Risks are borne in layers: first, the borrower’s collateral; second, Pool Delegates or pledged funds; finally, lenders bear losses. This mechanism incentivizes cautious lending by Pool Delegates and protects lenders’ interests.

Maple’s target clients are reputable, well-established institutions such as Wintermute and Amber Group, which have high liquidity needs but face slow traditional financing channels. With legal contracts and low-collateral arrangements, Maple can quickly provide funding.

Overall, Maple’s model combines on-chain smart contracts with off-chain legal agreements, enabling low or no-collateral institutional loans while employing multi-layer risk mitigation and prudent Pool Delegate management to ensure safety, offering institutions an efficient and accountable financing channel.

Product and Evolution of Models

Limitations of v1

Maple Finance launched its first version in May 2021, aiming to revolutionize blockchain-based institutional lending by providing credit channels without extreme over-collateralization (differing from traditional DeFi models). The protocol operated through representative-managed lending pools, where delegates selected borrowers and set loan terms. Loans were divided into tranches, allowing investors to choose risk and return levels. This approach quickly attracted billions in crypto institutional loans.

However, the low-collateral model increased default risk. The bear market of 2022—highlighted by Orthogonal Trading’s $36 million default—exposed vulnerabilities. This caused significant losses for lenders and questioned the initial model’s viability.

Improvements in v2

To address these issues, the team developed a second version, released at the end of 2022, with major enhancements in security and flexibility. All loans now require over-collateralization and are underwritten by Maple’s internal credit team, Maple Direct. The protocol also introduced a broader range of loan structures, including amortizing, bullet, and balloon loans, allowing borrowers to tailor repayment schedules.

In case of difficulties, borrowers now have refinancing options, enabling renegotiation without fully repaying existing loans. Additionally, the new version introduced flash loan-based liquidation options to reduce capital loss risks for liquidity providers.

SyrupUSDC Era

Launched in 2024, the Syrup protocol marked another significant evolution, enabling compliant DeFi users within eligible jurisdictions to participate more easily in lending while enhancing protocol security. Unlike traditional Maple pools, Syrup allows non-institutional investors to deposit USDC stablecoins into the lending market, which are then automatically deployed into Maple pools. These deposits enable users to mint SyrupUSDC and trade it via Uniswap at any time.

SyrupUSDC broadens market participation by allowing retail investors to fund liquidity pools, offering more attractive interest rates. This strategic move boosted Maple’s TVL, which saw strong growth over the past 12 months and accelerated into Q1 2025.

Maple Finance Services / Products

1. Institutional Lending Pools (Institutional / Overcollateralized Loans)

Maple offers lending pools managed by Pool Delegates. Borrowers are typically crypto trading firms, market makers, or institutions, requiring KYC/AML compliance. Assets are usually stablecoins or recognized collateral such as BTC or ETH.

2. Fixed-Term, Fixed-Interest Loans (Term Loans)

Some pools provide fixed-interest, fixed-term loans, offering stable, predictable yields for lenders to assess risk and return.

3. “Syrup” Series Yield Products (Yield / Vault / Stablecoin Deposits)

Maple offers syrupUSDC, allowing users to deposit USDC into Maple’s yield strategies—often pools or lending activities—to earn interest. These products are usually liquid and can be further used within DeFi.

4. Categorized Products: Blue Chip / High Yield / Bitcoin Yield / Overcollateralized Loans

Maple’s “Curated Opportunities / Earn” products are divided into risk/return tiers, such as Blue Chip (safer, with strong collateral like BTC or ETH), High Yield (higher returns with higher risk), and Bitcoin Yield (primarily Bitcoin-collateralized or Bitcoin-denominated yield products).

5. Lend + Long Strategies

These involve using high-yield lending pool returns to buy Bitcoin call options, combining interest income with leveraged exposure to Bitcoin’s price appreciation.

Borrowing / Institutional Finance

In addition to lending, Maple enables institutions to borrow, using their credit or collateral (depending on pool terms) for operations or liquidity needs.

7. Risk Control and Transparency

The lending process involves Pool Delegates conducting credit assessments, with loan terms, collateral, and interest rates transparent on-chain. Lending activities and fund flows are auditable and verifiable.

Maple Token

Maple’s token ecosystem mainly revolves around SYRUP (and previously MPL):

1. SYRUP Token

The native governance and incentive token. Holders can stake SYRUP to participate in governance votes—such as protocol upgrades, fee structures, and parameter adjustments. Stakers earn rewards, including a share of protocol revenues (via Maple’s revenue-driven buyback mechanism). SYRUP also incentivizes participation in yield products like syrupUSDC.

2. MPL (Legacy / Migrated)

MPL was Maple’s early governance token, used for governance, staking, and early pool participation. In 2024–2025, the community approved a migration plan, replacing MPL with SYRUP at a ratio of 1:100. After migration, MPL and its staked forms (e.g., xMPL) lose some utility.

Market Performance and Data Analysis

As of 2024, Maple has issued over $2 billion in loans, with approximately $332 million outstanding. After defaults, TVL dipped to a low but rebounded strongly in late 2023, reaching about $58 million, growing over four times in a few months.

Government bond tokenization has become a new growth driver, with the on-chain government bond products reaching $27 million, providing stable yields for risk-averse investors and DAO treasuries. This diversification has mitigated protocol risk and improved its image from a high-risk unsecured lending platform to a diversified on-chain capital market.

Investor and borrower profiles are evolving. Early borrowers were mainly crypto trading firms and market makers, but now institutions, DAOs, and hedge funds are investing in government bonds or low-risk assets via Maple. This upgrade in user base helps establish a more solid capital foundation.

Project Characteristics

Low-Collateral / No-Collateral + Credit Assessment Model

This is one of Maple’s core features. Many DeFi lending protocols require borrowers to over-collateralize (e.g., ETH, BTC, or stablecoins) to ensure that lenders can liquidate collateral if the borrower defaults or prices fall sharply. Maple allows low or no collateral in some loans, provided the borrower passes rigorous credit evaluation and reputation checks. This hybrid model improves capital efficiency and closely resembles traditional institutional lending (such as corporate bonds and credit loans). This credit-plus-collateral approach is a distinctive advantage.

Professional Risk Management and Pool Delegate System

Maple does not rely solely on smart contracts and market automation for risk management. It introduces the role of “Pool Delegates,” typically experienced credit professionals or institutions with traditional finance backgrounds. They conduct due diligence, assess operational and financial health, define loan terms (interest rates, collateral ratios, repayment periods), and assume roles similar to underwriters or credit committees. This hybrid of human credit judgment and smart contract execution allows Maple to improve efficiency while making more nuanced credit risk assessments.

The platform also offers diversified products, especially government bond tokenization and cash management pools.

Maple is not limited to unsecured loans. It has launched “Cash Management Pools” that hold US Treasury bonds or similar instruments, allowing non-U.S. investors, entities, and DAOs to hold US government debt directly on-chain. Features include:

• Good liquidity: often no or short lock-up periods, with next-day or same-bank-day redemption.
• High transparency: investors can view holdings and positions in real-time, with custody via regulated brokers.
• Compliance efforts: Maple uses Reg D exemptions to enable U.S. accredited investors to participate, easing integration with traditional finance assets.

Loans V2 and Efficiency & Flexibility Improvements

Maple continuously iterates its products, such as introducing Loans V2, which features:

• Reduced transaction costs and increased operational efficiency.
• Support for multiple loan structures (amortizing, bullet, balloon, etc.) tailored to borrower cash flows.
• Refinance options allowing borrowers to renegotiate terms mid-loan without full repayment, improving capital utilization.
• Improved liquidation mechanisms, including discounts and flash loan-based liquidations, to reduce losses.

Transparency and Auditability

Transparency is a key value:

• All loan contracts, terms, fund pools, and borrower default statuses are on-chain and traceable.
• Assets in government bond pools are held by regulated custodians, with open positions and interest data.
• Maple actively enforces compliance, including severing ties with dishonest actors like Orthogonal Trading and pursuing legal remedies—rare in DeFi.

Liquidity and User-Friendly Withdrawal Mechanisms

Many DeFi and RWA products face issues with lock-up periods, long redemption cycles, or high withdrawal fees. Maple’s Cash Management pools support near-next-day withdrawals or same-bank-day redemptions, with user-friendly fee structures.

Multi-Chain and Regional Expansion

Maple operates not only on Ethereum but has extended its Cash Management products to Solana, Base, and other chains. This diversification reduces congestion and high gas costs, enabling cross-chain and multi-chain asset management.

Regulatory and Legal Considerations

In the U.S., Maple’s government bond pools benefit from Reg D exemptions, allowing U.S. accredited investors to participate. This approach addresses legal and regulatory risks that many DeFi projects face regarding securities classification.

Risk and Loss Absorption Mechanisms

In the Orthogonal Trading default, Maple demonstrated:

• Immediate disconnection from the borrower, including revoking delegate roles.
• Use of “pool cover” or buffer mechanisms to mitigate losses for investors, rather than relying solely on collateral liquidation. These mechanisms provide more resilience compared to protocols that depend entirely on collateral and automatic liquidation.

Competitive Landscape and Differentiation

While Maple is not the only player in low-collateral or unsecured lending—TrueFi and Goldfinch have attempted similar models—these have limited scale and impact. TrueFi has become less active after defaults, and Goldfinch focuses on emerging market RWA with higher risks.

In the government bond tokenization space, projects like Ondo Finance are more established, with traditional financial institutions like Franklin Templeton entering the market, intensifying competition.

Maple’s differentiation lies in its team’s traditional finance expertise, enabling more accurate credit assessment and product design aligned with institutional needs. Its diversified product lineup—including unsecured loans, government bonds, and RWA—sets it apart from single-focus platforms. Transparency and ongoing compliance efforts further strengthen its position in the post-CeFi vacuum.

RWA Positioning

Maple is seen as a bridge between traditional institutional financing and DeFi, primarily by bringing real-world assets onto the chain through asset-backed lending or over-collateralized loans. Borrowers undergo credit screening and provide real assets or cash flows as collateral. Most loans are overcollateralized, with collateral value exceeding the loan amount or supported by traditional assets, debt, or income streams.

Recent Developments

Maple’s “Active Loans” and TVL in RWA lending have reached record highs. Its asset management (AUM) exceeds billions, with significant growth in institutional lending.

The Earn platform (formerly syrup.fi) is a milestone, enabling broader participation in institutional lending yields by aggregating capital into Maple’s pools, allowing ordinary DeFi users to earn from real-world asset-backed loans.

Product Strategy

Maple is expanding its RWA pools, with Pool Delegates performing credit evaluation, loan issuance, and risk monitoring—ensuring borrower authenticity and collateral quality.

The “Institutional Credit Expansion” roadmap includes deeper collaborations with traditional finance, such as private credit, corporate debt, and securitization products, as well as Bitcoin yield strategies.

In its DeFi Earn products, Maple integrates strategies and tools to make RWA lending yields more accessible and composable, including coupling with other DeFi protocols and derivatives.

Challenges

While Maple does not fully tokenize traditional assets like real estate or receivables into tradable tokens, its approach—combining loan contracts, collateral, and yield sharing—resembles RWA. Expanding asset types (e.g., real estate, accounts receivable, commercial assets) and improving liquidity could further enhance its role in the institutional credit market within DeFi.