How is the performance of the unsecured lending protocol on the chain in the crypto thunderstorm?

In the down market, the over-collateralized lending platforms such as Aave and Compound are always higher than the debt because the value of the collateral is always higher, so the funds of the platform and users are always safe . Many centralized lending platforms have been devastated by lending their assets to institutions such as Three Arrows Capital without collateral. For example, Celsius, which once managed tens of billions of dollars, has filed for bankruptcy protection.

This has led some insiders to question the unsecured lending model, believing that its security seems to have been falsified. The figures have improved this year. As of July 13, the TVLs of Maple, TrueFi, and Goldfinch have increased by 35.8%, 41.5%, and 191% respectively compared with the beginning of the year, while the TVL of Aave, the representative of the over-collateralized loan agreement, has dropped by 69.6% over the same period.

After the encryption storm, the unsecured lending agreement is in place, and the deposit has increased by 40% this year

Maple: Borrowing $10M from Babel, liquidated

Maple, which currently holds the majority of the unsecured lending market, operates through agents and pools, with each agent managing a pool of funds. The agent decides which institutions the funds can be loaned to and details such as the interest rate on the loan. This method is relatively centralized, but the professional knowledge of the agent can avoid some risks. Private pools for single lenders and single borrowers are now also added to Maple, but participants need to complete KYC first.

During the period from June 13th to June 21st, Maple updated the risks of Three Arrows Capital (3AC, Three Arrows Capital), Celsius, and Babel several times. The main points are summarized as follows:

1. 3AC has never used Maple for lending; Celsius operates a $20 million WETH pool on Maple, but Celsius is the only lender, that is, Celsius lends money to other institutions through Maple; Maple’s Orthogonal pool once lent to Babel $10 million.

2. Maple’s borrowers have no risk exposure related to UST/Luna, and less risk exposure related to 3AC and Celsius, and will continue to monitor in real time through one-on-one conversations.

3. Loans in Maple are mainly used for market making, Delta neutral strategy or high-frequency arbitrage, and usually do not hold directional positions.

4. All loans can be viewed on the chain, and a loan agreement with legal recourse has been signed with the borrower.

Thus, Maple’s direct exposure to Babel, 3AC, Celsius is $10 million. On the official website, the loan is shown as “liquidated”. Maple has signed legal contracts with borrowing institutions, and as long as these institutions do not go bankrupt, they need to repay the debt to Maple in full. However, it is currently unclear whether any of Maple’s borrowers have provided loans to 3AC or Celsius. If Maple’s borrowers deposit funds with 3AC or Celsius and cannot redeem them, it may also cause these borrowers to fail to repay Maple’s loans on time. loan. But this is the case for all unsecured lending platforms.

Even if the direct exposure is small, the shortage of liquidity and the panic does have an adverse effect on Maple. As of July 13, the two largest liquidity pools in Maple, Orthogonal Trading – USDC 01 and Maven 11 – USDC 01, have been exhausted, the remaining cash amount is zero, and the redemption operation of the depositor needs to wait for the borrower repayment. Since the last borrowing operations of these two pools occurred in early June, it can be speculated that the centralized redemption of deposit users led to the exhaustion of liquidity.

Maple’s announcement said that in the event of a lack of cash, lenders must wait for borrowers to repay. As the loan matures over the next few weeks, the borrower’s repayment will increase the funds available in the pool, which the lender can then redeem.

Since April this year, Maple has launched a lending business on Solana, and the two fund pools on Solana, X-Margin USDC and Genesis USDC, have liquidity of $1.06 million and $610,000 respectively, which can meet the redemption of ordinary users. need.

As of July 13, total deposits in Maple were $690 million, a 35.8% increase from the beginning of the year and a 19.3% decrease from June 1. The current overall capital utilization rate is around 97%.

TrueFi: TPS/3AC has a loan and will repay in advance on June 21

TrueFi, a project launched by the stablecoin TUSD team in 2020, now has two lending models. One is from the early days of the project to the present, each stable currency is a fund pool, and anyone can make a deposit, and decide whether to agree to the loan application by pledging TRU tokens and evaluating the creditworthiness of the borrower; the other is It is TrueFi Capital Markets, which was launched later. Each borrower corresponds to a fund pool, and a deposit to the corresponding fund pool means that funds are only lent to the borrower.

The loan records of TrueFi can be queried on the chain. In the recent risk events of 3AC and Celsius, Celsius has not borrowed from TrueFi. 3AC has two records of borrowing from TrueFi, the first time being on February 25, 2022 The first 60-day loan of 1.71 million TUSD will be repaid after maturity; the second is a 90-day loan of about 1.99 million USDT starting on May 21, 2022. The borrowers shown are all “TPS Capital/Three Arrows Capital”. Within less than a month after the second loan was initiated, 3AC was reported to be short of funds, but even if the loan in TrueFi did not expire, 3AC The repayment was also completed one month after the loan was initiated. Therefore, TrueFi did not directly suffer financial losses in the thunderstorms of 3AC and Celsius.

As of July 13, total deposits in TrueFi reached $416 million, a 41.5% increase from the beginning of the year and a 19.7% decrease from June 1. The capital utilization rate is 96.06%, and there is still some liquidity in various stable currency pools, which is convenient for users to withdraw.

Clearpool: Borrowing applications through TPS on June 9, closed on June 19

Clearpool operates as “Single Borrower Pools”. First, X-Margin, a third-party data platform that Clearpool cooperates with, will rate borrowers and give a borrowing limit; then Clearpool will add new borrowers at the front end; users can freely choose which borrowers to lend their funds to.

Clearpool had allowed TPS Capital to raise funds from users on its own platform.

On June 9, Clearpool announced an increase in the borrower pool of TPS Capital (TPS Capital was then known as the “OTC division of Three Arrows Capital”), allowing TPS Capital to borrow up to $17.3 million from Claerpool users.

On June 19, Nansen founder Alex Svanevik questioned TPS Capital’s borrower rating of A on Twitter, at which time the risk of Three Arrows Capital had been exposed.

On June 19, X-Margin responded quickly by disqualifying TPS Capital from borrowing and removing TPS Capital from the Clearpool platform. X-Margin said it “ensures that TPS repays the loan and that Clearpool’s lenders have no loss of funds”.

From this, it can be seen that TPS sought to borrow from Clearpool only when there was already a problem, and it was approved. Then the risk was exposed. After discovering the problem, X-Margin and Clearpool responded quickly and suspended TPS’s borrowing limit.

As of July 13, Clearpool’s total deposits were $97.88 million, and the public pool’s funding utilization was around 80%. Only five institutions are allowed to borrow from the public pool, Amber Group , Auros, FBG Capital, Folkvang, Wintermute, and most are also borrowers on both Maple and TrueFi.

Goldfinch: Lending to real-world businesses, less correlated with crypto market volatility

Goldfinch operates by combining the primary pool and the advanced pool. The primary pool is a single borrower pool. The invested funds will obtain higher returns, but also need to bear greater risks; the liquidity of the advanced pool will be allocated to each single borrower pool. , the yield is lower, but the repayment of the borrower will give priority to returning the principal and interest of the senior pool. Whether or not a loan application passes requires an auditor (participation by staking GFI) to be evaluated, and the auditor is randomly selected by the protocol.

Since Goldfinch’s borrowers are usually not crypto institutions, and the USDC loans obtained are usually exchanged for fiat currency, Goldfinch is basically immune to the volatility of the crypto market.

As of July 13, Goldfinch’s total deposits were US$102 million, and the utilization rate of funds was about 98%. Compared with the beginning of the year, the total deposits increased by 191.4% and compared with June 1. It increased by 21.4%. These borrowers come from more than 20 countries, and Goldfinch says it has provided loans to businesses with more than 1 million people.


The businesses of various unsecured lending projects are getting closer and closer. For example, at the beginning, TrueFi, a stable currency with only one fund pool, was selected to increase the fund pool corresponding to a single borrower; Maple operates a fund pool model from each agent , which adds to allow a single borrower or single lender to operate a pool of funds. More and more businesses require KYC to participate. The borrowers of Maple, TrueFi, and Clearpool overlap to a large extent, increasing systemic risk.

The impact of unsecured lending projects in the down market is lower than that of DeFi ‘s over-collateralized lending and centralized lending, which shows the effectiveness of this set of credit assessment and risk management solutions. Of course, this is partly because unsecured lending usually only supports stablecoin lending, while protocols such as Aave include volatile assets such as ETH, WBTC and even stETH.

Some unsecured lending protocols also face liquidity problems, such as Maple’s Orthogonal Trading and Maven 11 pools, which are completely exhausted and need to wait for the loan to be repaid before it can be redeemed. The high utilization rate of funds also brings about the problem of low liquidity.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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