Sid Powell - CEO & Co-Founder, Maple Finance Ep #69

Sid Powell is the CEO & Co-Founder of Maple Finance. Maple is transforming capital markets through technology and count traditional finance and crypto-native firms as customers. Joe McCann guest hosts.

00:35 -  What is Maple?                    

01:32 - How does Maple determine Credit worthiness?

02:55 - Expanding the addressable market  

04:35 - Who uses Maple and how they get started

08:18 - Defaulting and the recapture of collateral

13:21 - Maple's advantages against challenges lenders face in crypto

16:45 - Why use Maple: Governance and growth

19:27 - From Ethereum to Solana Integration                

23:37 - Maple and Composability          

27:13- Partnerships and future initiatives

29:56 - Bringing non-crypto folks into DeFi / Partnering with Circle

32:33 - Views on Contraction              

34:59 - How Maple started and where it is going                  

39:04 - Monetary policies and how they affect Maple

 

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Joe (00:09):

Hey everybody. Welcome back to The Solana Podcast. I'm your guest host, Joe McCann. And today, I have the pleasure of speaking with Maple Finance CEO and founder, Sid Powell. Sid, welcome.

Sid (00:22):

Hey Joe. Thanks for having me. Great to be here.

Joe (00:24):

My pleasure. I've been looking forward to this one. For the folks that aren't necessarily familiar with Maple Finance. Can you just maybe give a brief introduction as to who you guys are and what you do?

Sid (00:35):

So, Maple is a DeFi lending platform. We think of ourselves as a marketplace for institutional lending. So, the right type of mental model to think about that with is, in the same way that Shopify provides out of the box tooling to run an eCommerce business. What Maple is trying to do is provide tooling to run a lending business that just happens to be on chain. So the way that Maple works at a high level is you have managers of pools, we call them delegates, they'll set up a pool, which is like an on chain lending business or on chain credit fund, people and institutions deposit into that. And then, the manager goes and originates loans to corporate borrowers out of it. So, it's recreating a TradFi credit fund or a TradFi lending business, but doing this on-chain.

Joe (01:18):

That raises a first question for me, that is, if I'm providing a loan to an actual business, how does Maple go about determining the credit worthiness of that particular business?

Sid (01:32):

It's a good question. And, what we've tried to do with Maple is be asset light, in that, Maple does not want to be the lender or the balance sheet lender itself. Instead, what we're trying to do is give people who have the expertise to underwrite and assess credit. So I think, people who were in credit teams at financial institutions before, or they might have been in investment banking, but they understand credit and underwriting loans. What they're doing is they would follow a fairly conventional process where they would meet the management of the borrower, assess their financials, so balance sheet profitability, and then enter a loan contract with them, and set commercial terms around it. So, it is replicating a fairly conventional and tried and true process of assessing whether a borrower can repay the loan. It's not really reliant on on-chain determinants of credit worthiness in that respect. Really where the blockchain comes in is actually settlement and management of loans and portfolios of loans.

Joe (02:28):

Got it. That makes total sense. I mean, you're really saying, "Hey look, TradFi folks that understand how to evaluate credit, and credit risk, and credit worthiness, here's a new avenue for you to do this, which is on chain." And so, does that imply that there's more or less a much larger market for this, or is it more just breaking down the barriers of how TradFi credit funds, or credit debts actually tend to work?

Sid (02:55):

It's both. I often like looking at business history and one of the things I was always really interested in was the way th