- DeFi App Maple Finance imposed tighter restrictions for borrowers.
- Borrowers on Maple Finance are mandated to sign up with Credora.
Decentralized finance App Maple Finance imposed tighter restrictions for borrowers on its platform, to lower counterparty risk after a wave of disasters hit the cryptocurrency market this year. Borrowers must now sign contracts that require submitting annually independently audited financial statements, as per Chief Executive Officer Sid Powell. Additionally, they must provide monthly reports explaining their financial position, which must include balance sheet data.
Maple Finance CEO Powell thinks the enhanced regulations strengthen the capacity to monitor borrower health, in a turbulent market. And he added;
This type of view would have been powerful for the centralized lenders who had exposures to 3AC.
Tighter Step Towards Borrowers
Borrowers on Maple Finance are mandated to sign up with the Credora credit risk data platform. Credora offers lenders real-time data to assist them to identify the level of risk a borrower has accrued across various cryptocurrency exchanges.
Furthermore, Maple Finance’s tightening of requirements reveals the uncertainty that still exists in the cryptocurrency market. This step took place months after the collapse of the hedge fund Three Arrows Capital, which sparked a series of defaults that led to the failure of digital-asset lenders like Celsius Network.
Moreover, Maple Finance, which app links institutional lenders and borrowers, also suffered along with other DeFi platforms. At the end of June, the total value locked on its platform has decreased to $22.5 million from $153 million.
