• M11 Credit has resumed crypto lending on the decentralized credit marketplace Maple Finance.
• The new liquidity pool will offer lending only to selected clients and an expected annual yield of 10.75% in USDC with a 60-day duration.
• Liquidity pools managed by M11 Credit suffered $36 million of defaults following FTX bankruptcy.
M11 Credit Resumes Crypto Lending on Maple Finance
Blockchain-based financing firm M11 Credit has resumed crypto lending on the decentralized credit marketplace Maple Finance after upgrading its underwriting and monitoring framework. The firm announced the news in a Twitter thread where they provided details about the new service, including an expected annual yield of 10.75% in USD coin (USDC) with a 60-day duration for selected clients.
Improved Risk Management Framework & Credit Policy
M11 Credit has implemented an improved risk management framework and credit policy that was detailed further in a blog post published by Maple Finance. According to the blog post, the new liquidity pool will offer lending only to “premier low-latency trading firms with market-neutral strategies that have a strong and established track record of borrowing from M11 Credit pools”. To oversee this business, M11 has also appointed a new Head of Credit who is responsible for implementing real-time monitoring tools for both on and off-chain assets.
FTX Bankruptcy & Orthogonal Trading
In November last year, several loans saw missed payments and were restructured after FTX filed for bankruptcy which led to $36 million in defaults across all of M11’s liquidity pools. At the same time, Orthogonal Trading – one of the largest borrowers on M11 – was accused of misleading M11 and Maple Finance by misrepresenting how much it had lost in the FTX collapse, resulting in losses up to 80% for investors affected by these pools.
10.75% Annual Yield & Improved Monitoring Tools
The new liquidity pool offered by M11 will come with an expected annual yield of 10.75% when staked in USDC over 60 days as well as improved monitoring tools that are now implemented to ensure that borrowers meet their obligations without fail or risk defaulting on their loans completely.
Conclusion
Overall, while there were some unfortunate losses experienced due to FTX’s bankruptcy filing, it appears that M11 is looking towards better times ahead with its upgraded underwriting process, credit policy and monitoring tools designed to protect investors from potential defaults or missed payments from borrowers on its platform going forward into 2021 and beyond!