Introducing Maple Loans – Maple Finance
Maple Loans is a platform where users form Communities to Borrow and Lend undercollateralized loans to other Community members.
We built it to showcase how crypto can provide a great lending product to Borrowers.
The protocol takes care of requesting, funding, settling and making repayments allowing Communities to experiment and be creative with identity and risk assessment.
We were impatient to see more progress in undercollateralized lending. Overcollateralised loans have been great for buying ETH on leverage but we wanted crypto lending being used to buy things people need and can’t afford.
People still debate about how to tackle identity (Sybil fraud, government IDs, Self-Sovereign); credit scores (on-chain possibilities, FICO, other); privacy (zk-snarks); and incentives (undercollateralized borrower, overcollateralized protocol).
We wanted to turn debate into action and experimentation. So we built a platform to allow experimentation with all of these questions.
Think people can find a way to trust their borrowers? Make a Community and test it out.
Have an algorithm for on chain defaults? Make a Community and test it out.
Whatever your hypothesis. Make a Community. Test it out.
Communities are the fundamental primitive of Maple Loans. They’re decentralized, self-organizing groups composed of a Leader, Lenders and Borrowers. We see them being organized initially around Discord, Telegram, Slack or other channels.
Borrowers and Lenders can then coordinate loans in these channels and use Maple Loans to request, fund and manage the loans once the details have been agreed.
The first new members of a Community will probably have some existing relationship, providing a kernal of trust to seed the community. This is natural because the first people you feel comfortable lending to will usually be people you know. This then expands to their friends who don’t know you.
We hope this can then scale beyond 3 degrees of separation as users get more creative in dealing with risk and identity. Think on-chain credit scores, integrations with self-sovereign identities, social media account validation. The potential is there.
- Leader sets a Community and specifies the collateral required from (0% to 99%).
- Leader starts adding the addresses of Borrowers and Lenders to their Community.
- Borrowers start making Loan Requests (don’t forget to go to Settings and set an Approval limit to make transactions) which get posted to the Community
- Lenders fund as much as they want for any Loan Request and start earning interest.
- Borrowers start making repayments on the Loans | first is after 50 Days (=20 Days for funding + regular 30 Days) | then every 30 Days
- Lenders withdraw repayments to their wallet by Claiming Payment
- Loan is repaid and collateral released
- Return to step 3.
Simple!
Published at Sun, 02 Feb 2020 20:59:14 +0000
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