Q1 2022 Maple Treasury Report

By Joe Flanagan, Co-Founder, Maple

In the first quarter of 2022 Maple turned a profit for the first time, driven by increased loan volumes and revenue, exceeding the previous 3 quarters combined.

This report is based on the status of the treasury on 31 March 2022, figures shown are USD.

Turning a profit

Maple turned a profit for the first time in Q1 2022. Attributable to the increased appetite for uncollateralized lending from new and old borrowers across all pools. This quarter we surpassed $1BN in total loans originated, just 10 months after our commercial launch.

The business model of Maple is simple, the more active liquidity we can bring into our pools and the more loans issued, the more revenue flows to the Maple Treasury. The impending release of xMPL in Q2 2022 will represent an exciting evolution that will enable MPL holders to generate returns from these growing treasury revenues.

Revenue for the protocol is received through Loan Establishment Fees that are paid by borrowers at 0.99% annualized. Two thirds, or 66bps, is paid to the Maple Treasury and one third, or 33bps, is paid to the Pool Delegate that issues the loan.

Revenue breakdown

For further details and a deeper dive into Maple’s financial position, check out this 15 minute overview video I recorded recently with Token Terminal.

Let’s deep dive…

Source: Delphi Digital, The Race to Build a “Sticky” DeFi Debt Market

This quarter the platform originated $618M loans across 56 new deals, with $265M originated in February, and $297M in March respectively. The strong growth in loan originations is attributable to a consistent and committed focus from pool delegates and the Maple team, to ensure liquidity utilization rates are high and capital is routed quickly and efficiently. Utilization rates have remained consistently over 90% throughout the quarter across all pools ensuring that Maple is using the lending funds it is entrusted with as proactively as possible.

Source: Dune Analytics

Pool performance

Existing pools

Syndicated loan for Alameda Research — operated by Orthogonal Trading

On 17 February 2022, the fifth loan was issued to Alameda totalling $47.25M. At the time this was the largest loan ever issued on the platform. But not to be outdone, Orthogonal quickly followed this with a sixth loan that issued $77.77M on 22nd March — lucky for some — and took loans issued by Maple to over $1BN.

Deposits from new and existing lenders, have been rolled and increased consistently with notable sums contributed from ABRA and Coinshares who continue to utilize Maple’s broad yield generating solutions.

Visit pool.

Maven 11 USDC denominated pool goes from strength to strength

Throughout the quarter the Maven 11 team continued to excel in the management of their pool with 23 new loans issued, totalling $195M and growing their active liquidity in the pool to $271M (~60% Q on Q growth). New borrowers were onboarded including Auros, FBG and Dexterity.

Visit pool.

Read their Q1 results in their own words.

New pools opened and provided liquidity in wETH to meet market demand

Celsius joined as the first CeFi organisation to launch a lending business on Maple

On 24th February, the Celsius team opened a lending pool denominated in wETH on Maple. The private pool is funded by Celsius only and lends wETH to borrowers through Maple. Celsius launched the pool with $25M in wETH and issued loans to borrowers all in a matter of hours. Demonstrating the ease of use, benefit and utility for established lending businesses when setting up a pool on Maple’s DeFi rails.

Visit pool.

Read more on the partnership.

Maven 11 launched a second pool on Maple, this time denominated in wETH

On 11th March, Maven 11 launched a public pool denominated in wETH to meet strong lending and borrowing demand. They immediately issued $25M in loans to existing borrowers they’ve built a relationship and credit history with from their USDC denominated pool. Borrowers include Amber Group, Framework and Bastion Trading. Lending demand has continued to increase into Q2 2022 with additional deposits totalling 4,000 wETH now received.

Visit pool.

Read more.

Expenses

Below is a breakdown of Q1 2022 expenses, with an outline of budget vs. actual expenditure.

Overall, the expenses were in line with expectations with the major variance being in Team Costs and Recruitment. Maple is currently hiring for further internal recruiting resources to help with the expansion of the team. Two of the key hires that joined the team in Q1 2022 were brought on through external recruiting agencies. These expenses are significant but valuable as adding strong hires in key roles is a catalyst to the growth of Maple, with long-term benefits.

Team costs were materially above expectations in Q1 2022 due to the platform used to engage team members requiring an upfront deposit. The deposits totalled $198K for Q1 2022 and represent nearly all of the variance to budget expectations. Technically these deposits should be accrued and not expensed as they will be repaid when the team member exits, or offset against future expense but for ease of reporting and transparency we have elected to expense them here.

The remainder of the expenses for the quarter are modest and in line with a protocol of our size. We continue to have a strong focus on managing operating expenses and hold an attitude of frugality across the team. Obviously, this must be balanced by not missing important growth opportunities.

Our auditing arrangements represent a significant cost as we prioritise the security of our smart contracts. Our current arrangements are for each smart contract deployment to be audited by Trail of Bits and a public audit competition to be run through Code Arena. We then host an ongoing bug bounty programme with Immunefi.

Lastly, we invested in travel and being together as a team this quarter. We hosted our first team offsite, where nearly all the team attended and met in person for the first time. We look forward to making this a tradition and bringing the team together every 6 months as the benefits to our remote team and the Maple protocol overall are significant.

Factors contributing to quarterly growth

Maple has built a strong foundation since our commercial launch in May 2021. The growth numbers to date are encouraging and we are committed to Maple delivering as much growth as possible throughout 2022, and beyond.

In order to achieve this and make the most of our market opportunity, we have and will continue to invest in the development of the Maple team. This quarter the team has grown by 12 with key hires including Head of Growth, General Counsel, Head of Engineering and Product Manager and the Avari team joining through an acquisition.

Moreover, we have scaled our communications team and witnessed increased awareness and understanding of Maple’s offering. Communities and coverage have grown organically with premier news outlets Blockworks, Messari, Bankless and Delphi Digital publishing compelling opinion and research pieces.

We continue to refine and build our product with significant updates to the Borrower and Pool Delegate webapp flows, introduction of Loans v2 for Borrowers and the development of xMPL and Loans v3 smart contracts.

With the addition of our Head of Engineering and Product Manager roles, Maple’s ability to continue shipping quality, timely product initiatives will continue, and improve.

Closing out Q1 22

The first quarter of 2022 has been exceptional for Maple. Our focus remains steadfast to maintain this momentum; execute in our established market, build new product features and launch creative initiatives to expand our market penetration.

Some major initiatives and goals for the next quarter include:

  • Launch xMPL — enabling MPL holders to participate and share in protocol revenues by depositing their MPL to earn more MPL purchased by Maple’s Treasury
  • $2BN in active liquidity — we’ll continue to grow the lending balance in Maple’s existing pools and launch new pools to enable greater loan volumes on the platform
  • 1 year anniversary — Maple will turn 1 in May 2022 and we will be celebrating with a refresh of our growing brand
  • Maple Solana — due to launch in the next few weeks, meaning that Maple will be the first undercollateralized lending protocol on Solana
  • Expand borrower verticals — we plan to launch Maple’s first crypto mining pool

To operate completely transparently, here are the Maple wallet addresses:

Maple Treasury (collects fee revenue for the protocol) — 0xa9466EaBd096449d650D5AEB0dD3dA6F52FD0B19

Maple DAO (holds balance sheet and governor of protocol) — 0xd6d4Bcde6c816F17889f1Dd3000aF0261B03a196

Maple Labs (receives grants and pays expenses) — 0x94F98416CA0DC0310Bcaeda0e16903e19307539F

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