Maple Opens Cash Management Pools To Accredited US Investors

Ethereum-based debt capital marketplace Maple Finance plans to open up its Cash Management pool to accredited American investors via a Regulation D exemption.

The pool launched last April to offer qualified investors on-chain exposure to U.S. Treasury yields while complying with risk and accounting requirements.

A Regulation D exemption means the offering need not be registered with the Securities and Exchange Commission (SEC), but is restricted to accredited U.S. investors. The offering opens access to Maple’s Cash Management pool to high net-worth individuals, crypto funds, DAOs, Web3 start-ups and other eligible investors.

Maple’s Cash Management pool showed strong growth in July, surpassing $21.5M in total value locked, and paid approximately 4.7% to lenders after fees. The project’s MPL token has more than doubled since the start of the year.

Although it remains unavailable to retail investors, the offering from Maple represents a step towards compliant on-chain offerings by way of existing legal frameworks such as Regulation D, according to Maple cofounder and CEO Sidney Powell.

“In future, we hope that there would be a regulatory framework where it can be offered to everyone,” Powell told The Defiant.

Lightweight Approach

Maple’s investment vehicle structure is unique compared to most crypto lending platforms that treat depositors like limited partners in a pooled investment vehicle.

“Maple's structure is done more as a loan. So you lend to the delegate who's underwriting the collateralized loans or the loans that are collateralized with T bills. And so we've effectively done… a loan backed by another loan,” said Powell.

Maple is able to move faster with the lightweight approach, according to Powell, as onboarding processes become less cumbersome without “200 pages of documents that they need to go through to access the product.”

The company can also get people in and out of a pool more quickly, offering interest that begins accruing at the time of deposit and next-day redemptions, where other platforms might take as long as 48 hours, said Powell.

Rising Interest In Stablecoins

Demand from U.S. investors for earning interest on stablecoins is growing, and according to Powell, they are willing to pay a premium for an enhanced user experience or improved accessibility.

Market forces are adjusting post “Operation Choke Point 2.0,” said Powell, referring to an alleged politically motivated attack by the Biden administration on the cryptocurrency industry.

The SEC’s enforcement actions created friction in terms of entering and exiting the crypto ecosystem, said Powell.

“We're finding a lot more people actually want to hold stablecoins kind of permanently and since they don't want to go back into fiat [currency], they really need a good place to put them,” said Powell.

Expansion In Real World Assets

Powell said he would like to launch a trade finance product that pushes further into the Real World Asset (RWA) space in the next six to nine months, citing a lack of viable offerings in the area.

In discussing a proposal for RWA support in FraxLend's governance forum, Powell emphasized the need for intelligent handling of asset and liability tenors to avoid endangering the protocol. He cautioned against creating a dangerous imbalance by matching long-term real-world assets, such as one-year loans, with instantly callable liabilities like stablecoin redemptions.

The approach Powell would take involves a different form of asset-liability matching with term-based lockups similar to term deposits offered by traditional banks.

“You basically want to guarantee that people's funds will be there for a longer term,” said Powell.