The blockchain-based corporate credit market plans to address the gap left by bankrupt lenders that damaged trust on their way out, leaving Web3 businesses without a source for reliable debt capital.

Maple Finance, a lending platform built on Ethereum and Solana, plans to launch a direct lending solution to meet growing institutional demand. 

The solution aims to capitalize on the demand for a trusted lending desk in Web3, which has been lacking since the exits of players like BlockFi and Celsius. The team behind Maple wants to address this gap and facilitate the growth of a more mature debt market.

To facilitate that growth a sophisticated debt market is needed.

Early entrants to the market have since exited the space, damaging trust on the way out and leaving Web3 businesses without a reliable debt capital source.

Maple Direct launches to address this gap today. pic.twitter.com/FDSKbVYKgT

— Maple (@maplefinance) June 28, 2023

The direct lending facility will make use of Maple Finance’s network, data and technology and provide both borrowers and lenders with a solution tailored to them. According to the team, lenders can allocate capital to opportunities that reduce credit and counterparty risk while borrowers can access reliably capital on-chain without going through banks and intermediaries.

The first lending product is set to launch in July and will issue loans to crypto businesses across different sectors using outside capital from global institutional allocators. This will be the first time that Maple loans will be overcollateralized and secured by Bitcoin, Ethereum and staked ETH with technology developed by Maple and the leading custodian, the team said. 

Maple has provided credit for crypto firms since 2020, relying on its pool delegates to provide capital for loans. However, Maple took on a significant amount of bad debt following a tumultuous bear market and the bankruptcies of several large players in the industry. A report from CoinDesk in December estimated that Maple had around $54 million in loan defaults, representing 66% of the total outstanding on its four active lending pools. 

“By launching Maple Direct today, we pave the way for a new industry standard. We witnessed first-hand the shortcomings of CeFi last year and will raise the bar for lending desks through a commitment to compliance, transparency, and quality,” said Maple CEO Sidney Powell in a statement.