FTX-Alameda casualty Maple Finance launches institutional lending

On May 28, Maple Finance, an institutional lending platform in decentralized finance (DeFi), launched Syrup, a new protocol aimed at providing institutional yield to the DeFi community.

The launch of Syrup comes after the company faced significant challenges due to the FTX-Alameda collapse, including severing ties with Orthogonal Trading in December 2022.

The Syrup launch

Syrup offers users permissionless access to secured institutional lending. By depositing Circle’s USD Coin ( USDC ) on the platform, users receive syrupUSDC liquidity pool (LP) tokens, which they can use to earn yield.

According to the press release, Maple Finance will use fully collateralized loans to “the largest” crypto institutions to source the generated yield — a move some community members consider with skepticism in light of the FTX-Alameda debacle.

Related: Former FTX exec sentenced to 7.5 years in prison after guilty plea

How sweet is too sweet?

Maple Finance experienced loan defaults due to exposure to entities connected with FTX, such as Orthogonal Trading, which defaulted on $36 million in loans. The loan default impacted Maple’s lending pools and resulted in significant losses for lenders on the platform.

X community members expressed mixed reactions surrounding the launch of Syrup. Multiple users questioned the necessity of introducing a new token, while others expressed lingering distrust due to unresolved FTX-Alameda matters.

One X user’s reply  to Maple Finance’s announcement encapsulated the general community concern:

“Bit to unpack here. But the jist is, you are matching aml kycless lenders to onboarded borrowers and I guess..passing on the burden to the borrowers that it’s a permissionless pool with no aml kycd lenders? And as you are a tech platform it’s not on you.”

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MPL token migration concerns

In the announcement, Maple Finance also introduced the Syrup (SYRUP) token, which allows holders to stake in and participate in the ecosystem.

Holders of Maple Finance’s native Maple (MPL) token can migrate to SYRUP on a one-for-one basis with no additional dilution planned.

One X user raised concern regarding the “need for a new token” and the migration of MPL tokens:

“A new protocol powered by Maple has been introduced, but why do we need a new token and the migration of $MPL to this new token ? Why not simply use $MPL to power the new protocol?”

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However, the associated protocol Syrup.fi addressed the concern, explaining that it was “simply the name of the MPLv2 token.”

Maple Finance will host a webinar on June 4 at 7:00 pm UTC to discuss the inner workings of the Syrup launch.

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