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DeFi to Unite Degens and Institutions with Maple Finance - Yield Talks
Recorded: April 15, 2025 Duration: 0:56:30Space Recording
Short Summary
Maple Finance is making waves in the DeFi space with its innovative yield-generating products and strategic partnerships, showcasing significant growth and resilience in the face of market challenges. The launch of Syrup USDC and collaborations with major players like Sky and Spark highlight the increasing institutional appetite for on-chain lending solutions.
Full Transcription
Thank you. Thank you. Thank you. Hey, there we go.
Let's see if everyone can hear me.
Nomadic Joe Martin, see if you can unmute yourselves.
Yeah, can you guys hear me yes I
can there we go and um Joe Martin should I add I can add the maple account to the
space as well sure let's do that you could add that and then invited us co-host
that should also help with visibility that's fantastic yep yeah yeah no problem
at all it looks like it's added. Martin,
you sound great. Joe, you sound great. You guys can hear us okay?
All coming through perfectly.
Excellent. Hey, great to meet you officially. I'll go ahead and kick us off then. So,
hey everyone, I'm DeFi Dad here with Nomadic from the Edge Podcast. Thanks for joining us.
This is a new session of Yield Talks. We do a live space once a week where we talk with leading DeFi founders about new and interesting
DeFi and yields that we believe folks should be aware of. So today we are talking with the
co-founder of Maple Finance, Joe Flanagan, and the head of growth at Maple, Martin.
Guys, thanks for joining us.
How are you doing?
Going very well, thanks, Deepide.
Great to be here.
Yes, really excited to be here.
And with a bit of luck,
we will cross a billion in TCL during this spaces.
Yes, I noticed that.
So just a quick bit of background on Maple.
We're going to talk more about the value prop, but we're going to try to get into the weeds
on the yields.
Like Yield Talks is always about what are like current yields that can be earned.
And so I would describe Maple as one of the largest on-chain capital allocators.
It is a protocol that is dedicated to secured lending.
It is a protocol that has basically bridged the chasm between, I want to call it retail
DeFi and more of the institutional DeFi that's coming on-chain.
So you are getting to ultimately lend to
crypto institutional borrowers. And they have this amazing product called Syrup USDC, which we'll
talk more about. But it basically has been an unlock for anyone to be able to hold a yield
bearing stable coin that allows them to earn this like compounding yield with these lenders
or with these borrowers and then be able to you know unlock the composability of syrup usdc with
you know protocols like pendle so uh nomadic and i are users of maple we're really excited to have
you guys on this is going to be a really easy conversation because I think all of the
questions here reflect the types of things that we've thought about as users. But why don't we
start with, why don't we back up actually to the founding of Maple? Just give us the highlights
real, Joe. I don't want to like drag you guys through the mud with, there is an epic comeback story here,
just in case anyone's totally new to Maple. They had a huge run-up in terms of growth in the last
cycle. Ultimately, we can talk through, they had a number of borrowers that defaulted on loans.
And I think that led to a redesign of the protocol. And it's led to why
they're approaching 1 billion in liquidity today. So anyways, share whatever you think is important.
But again, we're excited to talk about Maple in 2025. Awesome. Appreciate the introduction
and bringing up a few things of trauma. But no, Deepa Dad, let's go through kind of that
story. But really, to go back to the start of Maple, you have to go back to 2018.
And that's when Sid and I were working together in traditional finance in Melbourne, Australia.
And we were working on institutional debt offerings and in particular
securitization. And we experienced firsthand in the institutional credit markets, just how
opaque, slow, laborious things are. And there'd just be no real automation or innovation
and technology brought to institutional debt markets. And so that's really what we started exploring.
We weren't big in crypto.
We weren't big in blockchain.
We maybe held a little bit of Bitcoin,
but we didn't know anything else about it.
And that's when we started looking for a solution
to the problem that we'd encountered
and came across smart contracts, Ethereum,
down the rabbit hole, we start to go. And so then for the first 18 months,
really all of 2019, and then the first half of 2020, we were building little proofs of concept.
And this is before DeFi existed, the term hadn't even been thrown around there. And we were building
little proofs of concept. And one of them that we built was on top of Compound.
Back when Compound was kind of one of the only protocols that had $25 million. And that was considered like an unbelievable treasury of funds within crypto to have $25 million.
And we built securitization.
What we were doing in traditional finance, we built that on chain,
on top of compound. And that's why we're called Maple, is because we built this securitization structure, which a debt stack looks like a stack of pancakes. And the cash flows that go down a
debt stack are like maple syrup flowing over pancakes. And so that's where the origination
of the story came from and where the name came from.
But it was that proof of concept in particular that highlighted to us that there's really no activity happening on chain.
There's no institutional quality assets that exist on chain that would bring about the need for securitization. And so that's where Maple kind of was born in the way that you see it today,
is that we had to focus on originating quality assets on chain. And so if you look at Maple's
infrastructure at the core level, that is what we do, is that we are a debt origination system
that enables for institutional quality loans to be created on-chain end-to-end.
So from capital aggregation, loan settlement, loan servicing,
the whole thing happens through our smart contracts.
And so you fast forward to today, and we've now originated over seven,
or coming up on 7 billion in loans.
And we've gone through what you alluded to, DeFi, Dad, a bit of a cycle change.
So from last cycle to this cycle, we've gone from being just a pure infrastructure play to now we
are on-chain asset management. And so we are responsible for the products that are created,
the distribution of those products, and the management of those products. And so we really control our own destiny.
And that's what's been the real catalyst for us to go from,
we nearly ran up, we nearly hit a billion dollars last cycle.
Then after FTX, to give people some numbers and some context on the return story,
we went all the way back down to 15 million, one five.
And so we really had to start the business again.
And we've built that back now to, as Martin said,
maybe crossing a billion on this call.
So it's been a story of resilience,
but also a story of strategic change,
utilizing our core infrastructure
to really transition into on-chain asset management
and start to set the tone for the way that crypto markets can operate into the future.
Yeah, it's just an incredible story. And Joe, I'm glad you just shared the background on where
the name came from. I really had no idea. But that's like a
really cool little tidbit as well. I want to kick it over to Martin here. You are head of growth. So
probably nobody better to tell the growth story that we've seen kind of play out over 2024, 2025
here. Maybe you can share what do you think has clicked so well?
Like, where have you seen this,
I would call it clear product market fit emerge
from what you were all doing?
For sure.
Yeah, that's an excellent question.
And I can take you back to sort of early 2023.
Back then, you can also see it on the TVL chart, but we were really
at close to zero in TVL. So we really went back to the drawing board and, you know, as a team
to decide, you know, what are new products that we're going to launch that are actually going to
appeal to users? And then what is going to be the distribution mechanism, you know, for
for getting those products into the hands of users.
And, you know, back then, I think RWAs was a really big trend, right?
People sort of started talking about it and there was a lot of interest in it.
And, you know, that was sort of an initial area we started getting into.
So we brought some receivables on chain and that was originally successful.
But quickly after we realized that crypto markets were going to come back,
right, even in the bear market, it didn't look like it, but we were, you
know, very convinced that was going to happen and crypto markets were going to
need credit, right?
And there wasn't really a large credit provider at that time.
So a lot of them actually ceased to exist last cycle. So we decided, you know, let's be that credit provider at that time. So a lot of them actually cease to exist, loss cycle.
So we decided, let's be that credit provider.
Let's become the largest credit provider in crypto
and start from scratch and actually build a product
that is sustainable, right?
So that solves some of those problems
that we saw loss cycle.
So we launched our blue chip secure pool in mid 2023.
And that was just over collateralized lending to institutions.
And it delivered a really attractive API for users.
We continued building out that offering.
And right now, yesterday, that was a report published by Galaxy.
And we are now one of the largest lenders in all of crypto.
So I think that has paid off tremendously. by Galaxy, and we are now one of the largest lenders in all of crypto.
So I think that has, you know, paid off tremendously, you know, that flagship
product offering, which is really over collateralized lending. So we had that in our institutional products and that was sort of for
credit investors and you have to go through KYC.
You know, we build up a whole distribution mechanism to find leads and convert
them into users.
And with that, we scaled to, you scaled to about 200 million in TVL.
And then last year, about one year ago, we had an off-site in New York, and we discussed
how can we open this up for all of DeFi, right?
So we had some benefits to our users from our product being building blockchain rails,
but it didn't really benefit from the permissionless nature
of DeFi, as well as the composability
that you guys mentioned earlier.
And that's when, where the idea of CERAP was born
and we launched CERAP USDC nine months ago.
And that has grown since then tremendously.
So that's currently at 450 million in TVL.
And it's really scaling so rapidly
because it is permissionless, right?
Anybody can deposit into it.
Anybody can swap into it through the secondary markets.
It's now integrated in Pendle.
You know, it's boosting Ethernet files yields.
It's integrated into OKEx and many other places in the ecosystem.
And right now, we're seeing a rapid expansion of those partnerships as well.
So, you know, we closed Sky and Spark, you know,
they've deposited 50 million into it,
and scaling up to a hundred.
So I think, you know, now that you start to see
a lot of these big partners coming in,
it just accelerates all the other big players
wanting to work with us as well.
So there's a lot of other big names that we're talking to
and closing deals with at the moment
to further scale up Serb USDC.
So that's really how it started. And that's also now where we are today is that we are not just over-colarized lending.
You know, we're actually expanding into asset management.
So we launched our Bitcoin product about a month ago, and that's already up to, you know, four or 500 Bitcoin. And, you know, we're rapidly scaling that. And, you
know, we're also looking to make that available as a DeFi asset.
So you can really think of us as the asset manager of the future
that's fully built on chain, which on one side, we have our
institutional products. So those are sort of what you're used
to in traditional finance, right? You go through KYC, you go through onboarding, there have our institutional products. So those are sort of what you're used to in traditional finance, right?
You go through KYC, you go through onboarding,
there's a diligence process.
And you can allocate into it
still with the benefits of on-chain, right?
So it's built on-chain,
you can verify the details, it's transparent.
And then on the other side,
those same yield strategies
will make them available through DeFi assets.
So CERB USDC being the flagship asset right
now backed by over collateralized lending. And then we're launching a Bitcoin asset soon as well,
which is going to be plugged into the same Bitcoin yield source, which maybe we can get to
in a bit more detail. And that's then also going to go wide and far in DeFi and benefit from all those integrations,
composability, and the permissionless nature of it.
Okay, so I want to break down the different sides of the business here.
Basically, how does the protocol work at a high level?
Because you just made mention, for example,
that Spark has allocated $50 million into Syrup USDC.
So for anyone who's unaware, Spark kind of looks like an Aave-like front end, but it is, I believe, a sub-DAO of Maker slash Sky.
And so anyways, one of their killer products is this SUSDS, the Sky Savings product.
And that I believe is earning a fixed 4.5%.
So anyways, a part of the way that they earn that yield is by working with other partner
protocols.
And so it's a very big deal that Spark is now working with you.
I think it reinforces the credibility of the Syrup USDC
product. So before we get more into that, though, let's talk about how are you serving these
institutional DeFi clients? How are you serving the average on-chain DeFi user? And who are the
people in the middle, despite the smart contracts that are powering
all of this, there is a human element with, I think you call it a pool delegate. I can't
remember, but someone who basically, you know, is vetting these borrowers. So anyways, Joe,
can you walk us through all three of those? Absolutely. Absolutely. And just first to pick
up on your point around, uh, around, point around the Spark integration and the significance of it is that there was a lot of hype around the billion dollar allocation into treasury yields from the Spark liquidity layer.
And so they just last week deployed a billion dollars into three different treasury yields.
But what's gone under the radar and is being marketed this week is that the very next allocation and the first non-treasury yield allocation was into Syrup USDC.
So that speaks to the calibre of the underlying yield that we're generating and the quality of the due diligence processes that are starting to form around us.
around this, right?
You get Bitwise, you get Spark.
You get Bitwise, you get Spark.
These are legitimate institutions and organizations
that are reviewing in detail the offerings
and seeing the separation and differentiation that exists.
So to speak to what those are,
is that the way that Syrup USDC works
and the way that our institutional offerings work
is that you have the underlying smart contract infrastructure
that is aggregating capital.
So institutional lenders and broader retail
or permissionless lenders through Syrup USDC,
we're aggregating that capital into a pool.
And so you can think about it a little bit
like an on-chain fund
where you're getting all of this capital aggregation.
And then what we do from that pool is we are initiating loans
to approved onboarded KYC legitimate institutions.
And so these are all of the biggest names across crypto institutions.
These are exchanges.
These are trading firms.
These are market makers, liquid funds.
Think of all of the large financial service institutions that exist across crypto, and they will be onboarded and borrowing actively from Maple.
And so those loans are initiated on chain.
And what's important about the on chain nature of that is everything is transparent and verifiable.
You can see in the smart contracts what amount of the loan has gone out? What are the
rates in terms of that loan? When is an interest payment due? Was that interest payment made?
So that full transparency that blockchain technology enables is built in to all of
the lending infrastructure that we've built. Then you mentioned about pool delegates so this was the the big change from last cycle to this
cycle is that last cycle we were operating as an infrastructure where pool delegates would
be the credit originator so they would come to maple they would set up a small lending business
and they would use our infrastructure we've done away with that model altogether. So the pool delegate, as it used to be, is Maple.
We've brought all of that credibility and work in-house.
And so we are the creator of the products.
We are the underwriters of the products.
We are the distributors of the products.
And we are the managers of the products on an ongoing basis.
So all of it end-to-end happens by the Maple Capital Markets team and by the Maple Technology
team.
And so there's no more this nature of third parties coming and utilizing our infrastructure.
We control our own destiny.
And so what that means is that we are performing the due diligence of all of these institutions
that are borrowing.
We're then also performing all of the due diligence of the collateral that's being taken to over collateralize these loans.
And then we're also responsible for all of the technology.
So we have a real time automated system that is managing all of the collateral, tracking all of the collateral,
issuing margin calls when margin calls need to be issued to borrowers.
And so all of this is now happening within the Maple Hub, which is a combination of our
DeFi and crypto expertise and the technology that we've built over the course of the last
five years in combination with our financial markets and institutional finance expertise.
And so we really stood at that confluence.
We are bringing the best of DeFi to the best of traditional finance
and really setting the stage for what the future of lending markets
and asset management should be in the future,
where you get all of the benefits of one without sacrificing
on the benefits of the other.
I love it. Thanks, Joe. Okay, I want to break down these yields a bit more. So maybe we'll
start with more of this institutional facing side of things. And actually, you know what,
another headline that caught me, and I wanted to ask you guys, I saw the Bitwise announcement. For me, that was like a big
sort of validation for Maple. And I'm just curious how they're working with you all here as well,
and what they're deploying into and just how they're utilizing Maple. But if you can kind
of weave that into, I just want to go over the main institutional offering offering so when i'm on the site i see this blue chip secured
i see high yield secured and then you mentioned the the btc yield i want to kind of dive into that
one a bit too but maybe martin joe whoever wants to kind of tackle these uh in any order you like
Sure, go ahead, man.
Sure.
Yeah, so I will take them in the order you mentioned them.
So blue chip secure, that's where it started.
So that is over collateralized lending, mainly against Bitcoin.
So that's sort of the most conservative offering on the platform.
And that's used a lot by corporate treasuries, you know,
yield funds and some high net worth individuals.
Then we have high yield secured. So that is, you know, we have other types of collateral that we accept as well.
So we have accepted in the past Solana, there's XRP in there, you know, you can imagine some other collateral types.
Like we won't go too far to the risk spectrum, but we'll accept some altcoins.
And then we can also stake that collateral.
So for example, we've had a bunch of Solana loans
in the past and we have staked that sold down
with for example, GDoSol, right?
So we'll make sure it remains liquid for liquidation.
But we announced the yield that way.
So historically,
I have secured has yielded about three, 4% above blue chip.
And we expect that to continue going forward as well.
And blue chip has yielded about four to 6% above Aave,
which is sort of the benchmark,
DeFi rate of course, for everybody.
Then in terms of your Bitwise question, so Bitwise has indeed
allocated into one of those institutional products. So they
are really a lender into Maple. And that has been a very
elaborate, diligent process. So you can imagine, you know, an
institution is not just going to pull the trigger in a week or
a month. That has really been, you know an institution is not just going to pull the trigger in a week or a month that has really been you know multiple months uh them diligent you know uh doing the diligence on maple
as a company on the team on the products the operational setup the risk management framework
you know the liquidation workflows the borrower underwriting, the security setup, you know, that has been a very
elaborate diligence process, which has been a huge stamp of validation that, you know, we've passed
that diligence process and we were actually their first, you know, large DeFi allocation. So that's
really exciting and that has opened up a lot of doors for us as well, as you can imagine. So
similar to the response you had where you were like, wow, that's, that's significant exciting that that has opened up a lot of doors for us as well as you can imagine so similar to the response you had where you were like wow that's that's significant you know
obviously a lot of other people in the industry at that as well so that was really a watershed
moment for us where you know we can use that in our conversations and and uh it opens up a lot of
doors then the bitcoin yield product so that's in collaboration with CoreDAO, which is a Bitcoin layer 2 EVM blockchain.
And they have a product where you need to stake your Bitcoin through qualified custody. So through,
for example, copper or Bitco to the core network together with the core token. So it's called dual staking.
And the Bitcoin remains in qualified custody at all times.
So it's not actually staked to the core blockchain.
You know, you sort of sign a message where you time lock it within the qualified
custody account. So, you know, we go with principle protected in that sense,
because there's no slashing risk.
We're not lending it out.
We're not bridging it over.
And it has generated over 5% net APY last month for depositors, which is extremely good yield on Bitcoin.
And it's also in-kind.
So it's actually Bitcoin yield with Bitcoin.
Okay, I've got a number of questions, which I think will be very helpful for
future lenders on the platform. So as a lender, a few things that I would want to know are,
how long are the loans on average that are like underpinning the different yields in those
different pools, just on average? How over collateralized do these lenders, do these borrowers have to be?
Remind us also just at a really high level, when would a liquidation happen? How often have they
been happening lately? And then also just whatever you can tell us about what sort of reserves you
hold for withdrawals, like basically how much of like a stable coin
pool would be left idle so that you can handle anyone who wants to get their money back?
And like, how long does it take to withdraw those assets? So let me know if you need me to remind
you of any of those questions. No problem. So yeah, so I think maybe just to frame things,
so everyone has context is that you can break down Maple into our two separate business lines.
You have our institutional business, which is available to accredited investors only, full KYC available in the US.
And that's those blue chip and high yield products and the BTC yield product.
They sit within that. And then you have our commissionless business, which is Syrup USDC.
within that. And then you have our permissionless business, which is Syrup USDC.
And so what you're to answer your questions, DeFiDOT, is that these are loans to the largest
institutions in crypto, and they are typically open term loans that are over collateralized by
Bitcoin, ETH, Solano, XRP, as Martin went through, and they'll typically be done at somewhere between a 50 and
70% initial loan to value ratio. So what that means is as 150 to 200% over collateralization
of the collateral asset versus the amount being borrowed. And then they'll be taking out loans
that will range in term from anywhere from two days, right, to 90 days.
And so we have a profile of those loans in our loan book that you can go and verify and see
all on chain and in the Maple web apps to see what the underlying loans that make up any pool
of capital are and where they're being deployed and what the terms of those loans are.
of capital are and where they're being deployed and what the terms of those loans are.
In terms of liquidity, we say on the institutional product side, so blue chip and high yield,
these are typically up to 30 days liquidity, but on average, we're servicing anywhere from
five to seven days.
On the Syrup USDC side, very different profile.
We keep a portion of it liquid so that people are able to access primary
liquidity, but then it's also integrated out into the DeFi ecosystem, right? So you could go and
take your Syrup USDC and borrow against it on Morpho as an example, or you could take it to
Uniswap and immediately swap from your Syrup USDC into USDC. So Syrup USDC, and it gets more and
more ingrained into the broader DeFi ecosystem, benefits from all the products and other utility that is built on top of it throughout the DeFi ecosystem.
I think I touched on all of them.
Let me know if I missed any DeFi there.
No, I think you covered it all.
Actually, this has probably been a good segue into Syrup.Fi, which should lead us into everything you just mentioned with Syrup USDC.
So can you just talk about what's been the evolution from what is a KYC product?
If you go to maple.finance and you're lending directly to those pools, You're submitting some KYC docs and it's a little more
formalized. Whereas the average DeFi user, if they go to syrup.fi, they're going to recognize
a platform that looks very familiar. You mint some or swap for some syrup USDC and then you earn
yield. And anyways, I'll let you talk through it. But there's a lot of really helpful information
if you go to syrup.fi.
Yes, yeah, exactly.
So, and maybe just to touch on a little bit
of the ambiguity or confusion that exists
out in the community and rightfully so,
is that we launched Syrup.fi
in the middle of last year
as a permissionless offering to be accessible outside of the United States.
And we wanted it to be entirely separate as a separate protocol from the Maple protocol.
Obviously still built and operated by Maple underneath,
but separate from it in appearance for compliance and regulatory reasons.
Fast forward nine months, those compliance and regulatory reasons aren't as pressing
and there's a lot more clarity and more clarity coming into the future.
And so what that will enable is that in the next month, you will see the brands start
to come together.
So you'll no longer have this separation of Maple and Syrup 5.
You will start to see everything coming under the Maple umbrella again.
And so that will help to clarify some of that ambiguity that exists out there.
And so Maple will be the asset manager,
and then one of its products will be Syrup USDC.
And so that should be a real clarifying point.
It also flows into the token, right?
We had to, and I think we'll get into this,
we had to rename and launch a new token.
And that new token is called syrup.
And so there's some confusion there.
And so just everything will come under Maple
and be utilizing that brand and reputation that we've been building for five years and remove that separation and ambiguity that's probably been across the ecosystem.
In terms of the apps, there will always be that institutional business available to accredited investors where they have to log in and go through their KYC processes.
And then there will be the DeFi commissionless business.
And so that's where assets like Syrup USDC will exist.
One thing to highlight there is that we go and launch products
on the institutional side.
And so we get volume for them.
We build out our processes.
We go through our due diligence and try new products there.
So as an example, this Bitcoin newer product that we just launched
or the secured lending that we launched 18 months ago,
we then go and build and scale it in an institutional capacity.
We then wrap it in a DeFi asset and deploy it into DeFi.
So that's what's happened.
Secured lending happened on the institutional side.
We then wrapped it in a DeFi protocol and launched Syrup USDC because we want to ensure and one of the core principles of why we started Maple was to bring institutional quality products to the masses.
investor world, then we're just reinforcing the same opacity and lack of access that exists
in traditional finance.
And so the fact that we can deploy DeFi assets that are permissionlessly accessible is helping
us fulfill that initial vision and mantra that we really wanted to adhere to in making
these quality products available to everyone.
Appreciate that, Joe.
So I write a weekly kind of column called Yields of the Week.
And recently I've noticed that Syrup USDC is always kind of in that kind of top five of competitive yields.
Maybe can you kind of walk us through what the secret sauce is under the hood? I
think you were kind of starting to with what you're saying. But I also noticed when I go
to the UI and I pull up the Lend tab, I get hit with something that says Pendle PT. And
maybe you can explain how Pendle is kind of inner working behind the scenes with Syrup
USDC as well. It seems like it's kind of
seamlessly integrated into the product. Yeah, absolutely. So first on the yield
differentiation is that we are facing off against large institutions that are borrowing for fixed
rate loans, normally with some fixed duration to it. And so why do institutions borrow from Maple rather
than borrowing from Aave or Compound or anywhere else? Is that one, they get to hold their collateral
in institutional quality or qualified custody. So they're not having to go and wrap their assets
and then post them into smart contracts and be subject to automated liquidation risk.
The other thing is that they're receiving
more white glove service. So they are facing off against a counterparty. There are proper legal
documents in place. And so they're getting that normal institutional quality experience that they
used to in a more traditional setting with all of the benefits that smart contracts and capital aggregation enable through blockchain technology.
So that is why we're able to generate a premium yield is because of the way that we're interacting
and the loans that we're structuring with our institutional borrower counterparties.
And as Martin alluded to before, that's why we outperform Aave yields by 4% to 6%.
And you can go and look at that on a 12 and 18-month track record now,
is that it's just consistent outperformance,
and it's because of the way that we structure
and allocate to our institutional borrowers.
Go ahead.
Oh, no, Joe, go right ahead.
All I was going to do was affirm I was opening Aave here today. And it's
still one of everyone's favorite yields because of how battle-tested Aave is. But Aave USDC is
earning about 2.74% right now. And if you're on Maple's site, or if you just look at syrup.fi,
site, or if you just look at syrup.fi, you can see that it's currently 9.6% APY. So, you know,
there's a pretty large difference, different risk profile, of course. And then if for those that
are KYC and lending directly to pools on Maple, I think the lowest yield there that Martin would
have mentioned is around 7%. So it's, it's, it's real,'s real. It's just a matter of, again,
is the setup for earning that yield ideal for you? Especially if you want to basically use a
yield bearing token like the Syrup USDC, or if anyone's listening to this and you are
someone who would want a KYC, maybe you're managing larger sums of money and you want to go directly to the pool on Maple.
There's just some great opportunities.
But anyways, Joe, keep going.
Yeah, no, no, spot on.
Appreciate those call outs.
And yeah, it is a consistent outperformance.
And you'll also see that Aave is obviously a variable rate protocol, as are most DeFi yields.
And ours is variable in the nature of it aggregates all of the fixed rate loans.
And so you'll see it's just a very smooth curve.
It's not fluctuating largely over time.
And now with all of the incorporation of Syrup USDC into the DeFi ecosystem, when you were previously probably foregoing a bit of liquidity risk, right, you weren't like sure of having the immediate liquidity withdrawal.
That's now really gone away because of secondary markets, because of the ability to borrow against it, and because of things like you called out Pendle.
So we integrated with Pendle late last year.
And for those that don't know, Pendle is an interest rate protocol. And so they have a mechanism fixed term rate, and the YT represents a variable rate.
And basically what happens is that you can go to Pendle, take your Syrup USDC there or deposit
directly into Syrup USDC from Pendle. And you can lock in a fixed term rate for the duration
of a yield profile. So currently, we have markets that go to the end of April
and to the end of August.
And so you can lock in at a fixed rate
what that yield is going to be until the end of August
if you want it to.
You could then also take the other side of that
and take the variable portion.
And so then you're just subject to the market.
And the reason that Pendle has had
so much success is that people have been using this fixed rate and variable rate products to
speculate on points programs. So Athena has been a big part of this program. And so that's been the
real unlock for Pendle. But we see them as a great partner for many years into the future.
We actually launched at a very similar time back in 2021 together, and they have a real legitimate
institutional quality infrastructure and product underlying it all. They've been the big beneficiary
of points, which hopefully go away over time, but what will remain is a quality product that will be accessible to institutions and sophisticated allocators to speculate on interest rate markets, which is a huge business in traditional finance.
And they'll need quality underlying yield protocols like Maple in order to make that happen.
So that's why it's a very, very symbiotic relationship with Pendle.
I got a question for Martin or Joe. So when I go to the
syrup.fi UI and look at the yields on Syrup USDC, it's around 9.6 right now. And around 6.1% of that
looks like real yield. And then there's something called drips on top, which is about three and a half percent. So the combination of the two make up that 9.6% yield. Can one of you
just break down drips again and maybe how people can still earn yield through drips, what they are,
they are and I guess how much liquidity is there,
and I guess how much liquidity is there, if there's any kind of lockup with drips?
if there's any kind of lockup with DRIPS?
Yes.
So DRIPS is a points program that works.
And that also is quite transparent.
So it's very predictable in the way that we set it up.
It's similar to other points programs
where you can earn points based upon your deposit.
So the more you deposit, the more points you earn.
Then there's other ways to sort of boost your points.
So one way is to lock up for three or six months
and you can get a 1.5X or 3X points boost.
You can also come through Pendle.
And right now with the new pool,
there's a 5X points boost.
And there's other initiatives that we would do with partners,
like wallets we've done in the past,
and other ways you can earn more points.
Now, the difference between this program and other ones
is that every quarter, at the end of the quarter,
we lock in the conversion rate.
And then you unlock your tokens on the 18th of the following month.
So you can think about it right now in Q2, right?
So if you deposit today, you'll be earning points until the end of June.
Then you're going to see the amount of Syrup tokens that you've gotten allocated, and you can claim those on the 18th of July.
So it's extremely predictable in the way that it's set up,
which really helps.
You're not stuck in some points program
and just earning points and points and points,
and you don't really know when it's going to convert to anything.
It's very predictable.
So users love it.
You can see the different boosts on the Syrup app.
And what most users do, we see about 70% to 80 of users that receive share of tokens actually stake it, and they become part of the ecosystem.
And when you stake it, you basically participate in Maple, and we do revenue buybacks.
So as you can imagine, with TVL almost at a billion, we make very strong revenues and we use 20% of that to buy back syrup tokens.
And we give those as staking rewards to stakers.
So there's a real yield of staking as well.
So if you go to syrup.5 slash stake, you can see that the current yield and about 50 plus percent of circulating syrup is actually staked.
50 plus percent of circulating syrup is actually staked.
So that also shows you how committed the community is,
as well as the user base, to making this product a success.
So it really allows syrup UCC users to, you know,
become part of the ecosystem
and benefits from its overall growth.
By the way, on syrup.fi slash lend, one of the things I love is just like the app is just so simple.
Like when you go there as a DeFi user, it's exactly what you want to see.
The information around, you know, what's the rate?
Is it underpinned by a real yield?
In this case, around like 6%.
Where does the other yield come from?
Drips.
How do I earn that?
I basically just decide, do I want zero lockup and I can just withdraw at any point?
Or do I want to commit for something like three or six months?
And this all assumes, too, that I'm going directly to syrup.fi.
I personally have swapped into syrup USDC without having to go
through the interface in the past. And that's the benefit of a really liquid yield bearing
stable coin like this. One question I had, and forgive me, this is probably more related to Pendle. But given that Syrup USDC is earning a real yield of around 6%,
for someone that goes to the Pendle markets, and there are two different Syrup USDC
markets as of this recording, one expires in eight days, one expires at the end of August.
one expires at the end of August. The fixed APYs on those for folks that buy the PT,
Syrup USDC, the one that expires in August is around 7.769%. Is that 7.769% on top of the
underlying 6% that I'm already earning with Syrup USDC? Or is that like the 7.7% represents all of that real yield
plus the added benefit of using Pendle?
Indeed.
So the 7.76% indeed represents both the underlying yield
and the drips as well.
So that's probably some alpha there for the the whitey side
yeah you I would uh not to give financial advice but I wouldn't be buying the pizza in in these
levels because you're also locking in a kind of five month board on these rates right this is this
is part of yield speculation is that you're locking in that underlying yield at these suppressed yield
markets, right? Like where you've got R-based sub 2%. So, yeah, so we would think that there's
a lot more to be made in speculating on the YT and because the PT, once you lock that
in, then it's done, right? Whereas YT, you're getting all of the variability of the underlying yield plus the
points. All makes sense and appreciate that insight, guys. Why don't we end with one more
question just around like, where do you see the puck going with institutional adoption and DeFi?
Like you're one of the few protocols that's like working at the forefront of this. And yeah, I'd love to just know, like, do you see that appetite growing for these folks
to get on chain?
What's important to them?
You know, like I see, you know, daily I'm checking rwa.xyz and, you know, there is a
large majority that's on Ethereum mainnet.
I think that has a lot to do with of
course like the the reliability like 10 years of uptime um so yeah wondering like what else can
you share like what are you hearing from your defy institutional clients
so there's definitely been a a major shift and an obvious major shift since the change in administration. And that
is something that is actually not just speculation or not just noise, but is actually happening
in reality. Now, these are always longer term sales cycles, but you will see over the course
of Q2 and into the rest of 2025, that Maple starts to onboard and interact
with larger and larger traditional institutions
because they are much more willing and wanting
and feel free to engage within crypto markets more broadly
and within a more DeFi or on-chain context.
So that is definitely happening.
And we think that we're going to be the huge beneficiaries of that
because we still operate in a way that they're able to maintain
their minimum compliance standards, right?
In the same way that Bitwise, a registered investment advisor,
is willing to allocate to Maple,
will be the same way that other Wall Street
and larger traditional financial institutions are able to allocate to that to us they're not yet in
a world where they can go and put it into permissionless DeFi they still need to maintain
KYC and AML standards those are things that that need to be ensured and we provide the products
that enable access for that then I would say say that the other thing that is going to be unlocked
is that we think about our product offerings in three main buckets
and across two main assets.
So those two main assets are we only really care about stable coins and Bitcoin.
Stable coins are the unlock of bringing US dollars on chain and enable all of DeFi to exist.
And then Bitcoin is the collateral asset of the system.
It's the only real asset that institutions at this point care about.
And so that's why we are hyper focused on offering products that only sit within those two asset classes. Why should we go
and focus on a new $10 million stablecoin when we have a $2 trillion Bitcoin market to go and get
capital from? Or we have a $250 billion stablecoin market of USDC and USDT growing to a trillion
dollars this cycle. So we're super focused on those two assets. And then within that,
we think about three main product lines. We think about Maple Institutional, which is us facing off
against Bitwise and your Wall Street firms, and so bringing them on chain. And so we see that
business growing to a billion dollars this year. Then we have Syrup USDC, fastest growing product
integrated into the broader DeFi ecosystem, going to be plugged into SeFi as a yield source.
We see that growing to one and a half billion this year.
And then finally, our new Bitcoin yield product.
That's where we've been trying to create a Bitcoin yield product for over six months now.
And this is where there is so much large allocators sitting on so much Bitcoin that they have nothing to do with.
And so this will be the unlock to start to bring Bitcoin out of wallets into yield sources and then from there wrapped into the DeFi ecosystem.
And so if DeFi is really to reach its full potential, Bitcoin has to be much more prolific than it is today.
You've maybe got what, 30 million bucks of Bitcoin
that circulates in DeFi of a $2 trillion asset.
That needs to be 10%, 20% and growing
in order for real capital to start to flow into DeFi.
And so we wanna be a real participant in that market
in ensuring that there's utility for Bitcoin created
and that we then bring it and wrap it and bring it into a DeFi ecosystem.
So those three buckets, Bitcoin yield, Syrup USDC and our institutional business.
And we believe we can scale to $4 billion by the end of the year
and be that real catalyst for institutional capital flowing on chain
and creating the future of what asset management should look like. Yeah, this has been a shift in narrative, I want to say, within crypto.
If you've been in the space for years, you've had your head on a swivel. You're always looking to
what's new. You're always on guard for what's the next shiny thing that we're all supposed to be chasing.
But we are seeing a real pivot here because of the adoption that's happening with larger capital allocators, institutional type investors.
These folks want to be able to earn reliable, competitive stablecoin yield, and they want to be able to earn reliable, competitive Bitcoin yield,
which is just insane to say that this is real now. We actually have appetite for folks to be earning
yield on their Bitcoin. And to your point, Joe, it's such a small fraction. The tokenized Bitcoin
that has been an enormous part of the growth story in DeFi, it is only a small fraction of the total market cap of Bitcoin.
So it's just a big opportunity for growth with protocols like Maple.
And there is a reason that you guys are growing.
reason that you guys are growing. I mean, you've been working on this problem for many years.
I mean, you've been working on this problem for many years.
Despite what someone else might tell you who's new to the space, it takes a lot of time to work
on really hard problems. And in order to solve those really hard problems, you have to just keep
working at those for many, many years. So it's so great to like see you guys thriving. Like it's so rewarding to believe
in fundamentals and to see a team that is so fundamentally sound, but I think is going
to clearly benefit from, you know, like the next, the next wave of adoption here, like
whatever speculative mania we see next stable coins and Bitcoin is going to be a huge part
of that story and excited too for the ETH
products that you guys work on as well, but understand where your focus is right now.
So I think this is a great place for us to wrap up. I want to first remind everyone here that you
should go learn more at maple.finance. You should also go to syrup.fi.
And otherwise, just use your neighborhood DEX aggregator.
You can get into Syrup USDC that way as well.
Or otherwise, go exploring on Pendle.
Again, those PT tokens are awesome, even though I do take into account the feedback from Joe around the YTs being potentially a great opportunity. And then I
want to remind everyone here that they should follow Maple Finance on X, follow Joe underscore
DeFi. If that's not proof that he's been here for some time, I don't know what is. And then follow
Martin D. Rika, which is Martin's handle here as well. Guys, I want to give you the final word.
Anything else here before we go?
And otherwise, just thank you for your time.
Thanks for coming on.
Everyone should be subscribing at the-edge.xyz.
We are regularly covering Maple Yields.
So if you're looking for weekly reminders,
we are absolutely putting those out there about these different yields we discussed today today yeah just want to thank you very much Steve by that you've been a a big supporter
of Maple for a long time and uh and a big supporter of the industry and and legit projects that are
trying to trying to build and scale things for the long term so really appreciate you um and I would
say that in this speculative world where we all live on crypto Twitter and
there's more and more meme coins and getting caught up in 2000X potentials that we've missed,
I would say that to contradict that is that in these hype cycles, long-term thinkers and
long-term allocators are the ones that really get rewarded. And I believe that more now than I did 10 years ago.
And so I think that the opportunities that are out there
through Maple and through other legit projects
that have been building for a long time
is hopefully starting to be realized.
And it's through support from you Nomadic
and you DeFi data and the way that you advocate
and pick out these projects so appreciate your support and the voice you have across the industry
all right well everyone thank you for joining us if you want to share this conversation later
you know if you enjoyed it and you want to share it with a friend obviously it's recorded here on
x but we will republish this in a few hours through
the Edge podcast. So great time again to subscribe at v-edge.xyz. And we'll try to
clean up the audio a bit, do our best to use some AI tools there. So otherwise, everyone,
thanks for joining us. Joe, Martin, have a great day, and we will see you next time.
Thanks, guys.
Thanks, gents.
Thanks, everyone.
Talk soon.
