Bitwise, the cryptocurrency index fund manager, has made its first DeFi allocation via Maple Finance, the onchain credit platform. According to an announcement on Thursday, the partnership will provide Bitwise’s institutional clients access to compliant, onchain investment opportunities.
The partnership highlights a growing trend of institutional capital moving beyond traditional fixed-income products into onchain credit opportunities tailored to their risk profiles. "This marks a pivotal step as institutional capital increasingly seeks structured, transparent and yield-generating opportunities within the digital asset space," Bitwise wrote in a statement.
Crypto lending is a complicated industry that has seen a number of bankruptcies, including by centralized credit firms like BlockFi and Celsius. In theory, bringing the activity onchain increases transparency and decreases the risks of human bias during defaults.
"In 2022, I would say overall leverage was much higher in the market than where it sits today," Maple founder Sid Powell told The Block. "The problem with that was it exacerbated contagion because you would have people borrowing from each other and then lending to third parties, causing too much interconnectivity between different lending partners."
Maple issues over- and under-collateralized loans backed by digital assets and has delivered fairly consistent, risk-adjusted yields since launching in 2021. The protocol launched its SYRUP token in 2024, offering a way for holders to participate in governance as well as stake the asset to secure the protocol while earning rewards.
Powell noted that "at this point" the protocol mostly manages over-collateralized loans in a departure from its original focus on under-collateralized lending. "When we entered the market back in 2021, over-collateralized was already very saturated," he said. The protocol has about $620 million in total value locked.
"What we do a bit differently, though, from others is that we segregate the pools," Powell said. "So if you're risk-averse, you can have a strategy where you're only putting your dollars into Bitcoin and ETH-backed loans. If you're willing to get paid a little bit more to take a little bit more risk, you can put it into a pool that will do loans against Solana or XRP."
In January, Maple launched a "Lend + Long" structured yield product that buys bitcoin call options using revenue from its high-yield lending pool. The product was marketed towards institutional investors, corporate treasuries and yield funds. In 2023, it launched a direct lending arm called Maple Direct.
Launched in 2017, Bitwise manages a suite of index funds and actively managed investment products including ETFs, separately managed accounts, private funds and staking products. It counts "thousands" of financial advisors, family offices and institutional investors as clients. The company, which claims to manage $12 billion in client assets, has been particularly active in filing alternative crypto ETFs in recent months, including products that would give investors exposure to APT and XRP tokens.
Last month, Bitwise raised $70 million from a host of investors including Electric Capital, MassMutual and Haun Ventures, according to a social media post.
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