CeFi Meets DeFi as Celsius Joins Forces with Maple Finance on Crypto Lending Protocol

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    Celsius, a centralized crypto lending platform, has become the first CeFi lender to launch a pool on Maple Finance, a decentralized protocol facilitating undercollateralized cryptocurrency loans to institutions, the venture said today.

    The Maple pool is also the first endeavor of CelsiusX, the newly launched DeFi arm of Celsius. Celsius told The Defiant that the milestone marks the start of its journey towards “creating a future where centralized and decentralized financial systems will coexist.” 

    Sidney Powell, the co-founder and CEO of Maple Finance, said Maple is planning on partnering with more CeFi lenders in the future.

    Undercollateralized Lending

    “We are a technology platform for credit experts to run lending businesses and are in constant consultation with regulated and listed firms,” he said. “Our infrastructure is built to scale and support institutions across CeFi, DeFi, and TradFi.”

    Celsius is betting that the undercollateralized crypto lending market will grow significantly in the current years. The sector currently represents less than 1% of the outstanding debt market. Maple has facilitated more than $750M worth of loans to date.

    On Feb. 24, Celsius launched a $30M pool of Wrapped Ether, comprising the first non-USDC pool on Maple Finance. Celsius hopes to finance “fast-growing crypto institutions via the pool.”

    “We are excited to use Maple’s DeFi rails to provide efficient access to capital for blue-chip crypto institutions,” said Alex Mashinsky, the CEO of Celsius. “Celsius will draw on its deep experience in underwriting and look forward to welcoming new borrowers this year and beyond.”

    Celsius will issue loans based on the “profitability, balance sheet strength, and credit history” of prospective borrowers. Mashinsky told The Defiant that Wintermute, a leading algorithmic crypto market maker, Framework Ventures, a digital asset venture capital firm, and Amber, a cryptocurrency trading firm, have already been approved as initial borrowers by Celsius.

    The firm will join BlockTower, Orthogonal Trading, and Maven 11 as a pool delegate on Maple Finance. Celsius also plans to explore launching additional pools that may offer loans using other crypto assets in the future.

    Maple Finance allows firms to launch undercollateralized lending businesses built on its DeFi rails. The protocol’s smart contracts facilitate loan origination, management, and real-time performance reporting among other tools.

    Immutable

    Powell told The Defiant that Maple has originated more than $768M worth of loans since launching in May 2021, and currently boasts a TVL of $654M.

    He emphasized that traditional centralized asset managers are able to maintain regulatory compliance within the DeFi space, only “faster and more efficiently because information is on-chain, and immutable.” 

    Maple also hopes to emerge as “the dominant institutional capital network in crypto” by adopting a multi-chain strategy in 2022. The multi-chain focus comes after Maple acquired Avari, a Solana-based undercollateralized lending protocol, in January.

    “The acquisition of the Avari protocol means we will expand to Solana in Q1 2022, and begin to welcome high-quality players from the Solana ecosystem such as DAOs, protocols, and institutional investors,” Powell said.

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