Analyst Coverage – Maple Finance and the Evolving Onchain Lending Market

Analyst coverage – Research from analysts using Token Terminal

Executive Summary

• Token Terminal data reveals market dominance and a concentration of liquidity around Aave in the DeFi lending sector, with competing DeFi protocols experiencing growth challenges in comparison.
• In contrast, Maple, a DeFi lending protocol that facilitates direct lending to crypto-native institutions, has experienced substantial growth in active loans, pointing to growing institutional demand for onchain credit.
• Maple’s newest product, Syrup, will provide this diversified source of yield for the wider DeFi ecosystem.

Introduction

Maple Finance’s institutional debt market matches lenders with high-yield credit opportunities backed by overcollateralized loans.

Founded in 2020, Maple has introduced multiple product offerings alongside its core direct lending product, including tokenizing US Treasuries to provide ‘real-world’ yield to onchain protocols. Today, the company is introducing Syrup - a DeFi protocol granting permissionless access to its institutional debt market.

While Maple is a relatively small player in the wider DeFi lending ecosystem, Token Terminal data reflects a growth story that reveals rising institutional demand for onchain credit.

The larger ecosystem

A quick look at the twenty largest protocols in the DeFi lending ecosystem over the last six months reveals high concentration of active loans on Aave. Aave has facilitated more than 60% of active loans at the time of writing - followed by MakerDAO (dba Spark Protocol - 13%), Morpho Labs (9%), and Compound (7%).

In contrast, Maple Finance’s $119.9M in active loans represents just under 1% of the total active loans among leading protocols.

TVL figures reflect a similar disparity. This growing concentration of liquidity is also supported by Aave’s interoperability with several DeFi ecosystems across multiple chains.

A Shifting Landscape

Digging into Token Terminal data reveals two important trends in the DeFi lending sector:

• Growth in active loans to retail borrowers concentrating on Aave
• Growth in active loans to institutional borrowers concentrating on Maple

While Aave’s active loans (visualized below) grew 2x over the last six months, many of its closest competitors have only experienced mild growth or declined precipitously.

To illustrate further, seven of the twenty largest lending protocols experienced double-digit percent declines in active loans over the last 30 days.

Meanwhile, Maple has experienced nearly 2x growth in active loans during the same six-month period (see below). Notably, these loans are overcollateralized loans to institutions, rather than to retail borrowers.

Further, the protocol’s 20% growth in active loans over the last 30 days outpaced all of the 20-largest lending protocols in DeFi.

Growth in Maple’s debt marketplace, with accredited investors offering dollar stablecoin deposits on one side and institutional borrowers depositing crypto collateral on the other, signals that both institutional borrowers and high net-worth individuals are attracted to the prospect of crypto-native liquidity and yield. As such, Maple TVL has risen demonstrably, reaching $276M at the time of writing - a 3x increase over the last six months.

A substantial share of the growth in TVL comes from Maple’s High Yield Secured pool (consisting of loans backed by select altcoins) and Blue Chip Secured pool (consisting of loans backed by BTC and ETH).

As DeFi natives seek this alternative form of yield, Syrup protocol has also contributed to growth in Maple TVL. Syrup leverages the same smart contract infrastructure and network of institutional borrowers as Maple, which for the past year has consistently produced higher yields than comparable protocols (such as Aave v3 USDC) and offers both diversification and sustainability in the DeFi lending market.

During its early access period, Syrup reached $25M in TVL in less than one month and currently offers more than 18% APY on USDC deposits (compared to 5-7% for USDC deposits on Aave v3).

Leading up to the launch of the SYRUP token, Syrup is also offering rewards to lenders, known as Drips.

Conclusion

Overall, the DeFi lending market data reflects a confluence of trends: a liquidity moat around the largest lending protocol, stagnation or decline in TVL for protocols with a similar offering, and the early signs of interest in onchain credit from tier-1 institutional borrowers.

Maple is expected to continue playing a role in meeting this institutional demand through its secured lending product and passing on this yield to DeFi natives through Syrup.

Analyst’s Disclosure: Author(s) may own cryptoassets named in this article and/or are core contributors to the project(s) being covered.

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