- Celsius is dipping its toes in the water of decentralized finance lending, leveraging Maple Finance’s infrastructure rails in the process.
- Celsius has enlisted the help of capital marketplace Maple Finance to manage and issue DeFi loans.
- Loans will be evaluated based on a borrower’s credit score, profitability, and balance sheet strength.
Celsius, a cryptocurrency lending platform, is dipping its toes into DeFi by becoming the first centralized finance institution to use capital marketplace Maple Finance to offer its services.
Celsius will issue and manage under-collateralized loans as a delegate from a pool of $30 million in wrapped ether (WETH) using Maple’s DeFi (decentralized finance) infrastructure, according to a press release issued on Thursday. Wrapped tokens are cryptos from different blockchains that have the same value as the original. In exchange for a fee, Maple’s pool delegates oversee lending pools and assess borrowers.
Maple’s head of capital markets, Daniel Kim, said that, “The partnership came together naturally after we chatted in Q4, 2021.” He went on to say that the companies’ missions and areas of expertise were in sync.
“It only took a few conversations to realize that using Celsius as a pool delegator was a viable option.”
Businesses like Celsius can get tooling and smart contract kits from Maple Finance, as well as turnkey solutions for loan origination, loan management, and real-time performance reporting.
“This…shows the next growth in crypto,” Kim continued, “where centralized finance and DeFi platforms are collaborating.” “It helps us achieve our goal of making Maple the dominant institutional capital network in crypto,” says the company.
The profitability, balance sheet strength, and credit history of the borrower will all be considered when making a loan decision. As it continues to fund “fast-growing” crypto organizations, Celsius said it intends to increase the number of borrowers and loans provided in the following year. As a pool delegate, Celsius joins BlockTower, Orthogonal Trading, and Maven 11.
The DeFi protocol says that its pool delegate concept is “unique” in that it allows enterprises and credit funds to use its rails to act as lenders in the embryonic DeFi industry.
“We can move swiftly and securely into this market because of Maple’s financing infrastructure,” said Celsius CEO Alex Mashinsky.
“Celsius will rely on its extensive underwriting experience and looks forward to welcoming new borrowers this year and in the future.”
According to data from supplier DeFi Llama, more than $670 million in crypto loans have been generated on the protocol since its inception in May 2021, with over $650 million in total value locked. Maple intends to meet a $5 billion loan volume target by the end of the year by matching consumer demand and expanding into new regions, according to the company.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.