Pitched as a “risk-free rate,” Maple Finance is finally opening its newest lending pool to accredited U.S. investors.
The pool generates a hefty 4.67% yield powered by U.S. Treasury Bills, a boring asset that’s made headlines again thanks to the Fed’s move to raise interest rates and combat inflation.
The pool itself has been live for some time and today’s news means that accredited U.S. investors can finally take part in the offering. An accredited investor is one that the SEC classifies as qualified to invest in complex assets, enjoys an average income of $200,00 per year, or already works in the financial industry.
“Maple’s Cash Management pool stands out comparatively for DAO treasuries because it provides compliant access to a ‘risk-free rate’ for any accredited investor or institution in the U.S through a RegD offering,” Maple Finance’s CEO Sidney Powell told Decrypt.
The firm is a unique piece of blockchain-powered financial middleware.
Like Shopify, Maple’s platform lets firms spin up their very own credit facilities and begin executing lending activities with interested parties. Last year, in the depths of the bear market, the firm announced the launch of a $300 million lending facility targeted specifically at struggling Bitcoin miners.
The pool, like its cash management offering, isn’t funded by Maple; instead, Icebreaker Finance added the funding and then took on the role of vetting any potential borrowers. This meant managing its own risk and underwriting deals.
The sole borrower of the cash management pool is Room40 Capital, which uses StoneX as its broker to manage the pool.
One of the key selling points here, instead of turning to a traditional lending or banking partner, is the hefty administrative overhead involved. Through this pool, the onboarding process is a reported 15 minutes for investors. Powell added that there are also “no hidden fees to deposit or withdrawal” from the pool.
When asked why investors wouldn’t turn to DeFi-specific alternatives, notably Maker’s current 8% yield, he pointed to a key “trade-off in risk.”
“For pools like Maker’s, which yield source is a mix of assets including corporate debt and commercial loans, the allure of higher returns comes with a trade-off in risk,” Powell told Decrypt. “It’s also worth noting there is already a proposal to lower the DSR rate to a max of 5%.”
And with tomorrow’s CPI report expected to come in hot, higher rates–and higher returns on Maple–may very well be in the cards for investors.
