Bitwise Partners Maple Finance for Institutional DeFi Credit
1min read Bitwise, a leading cryptocurrency index fund manager, has made its first foray into decentralized finance (DeFi) by partnering with maple Finance. This collaboration aims to provide Bitwise's institutional clients with access to compliant, transparent, and structured on-chain credit investment opportunities. The partnership underscores a growing trend of institutional capital shifting from traditional fixed-income products to on-chain credit solutions that align with their risk profiles.
Maple Finance, an on-chain credit platform, offers a compliant infrastructure for digital asset-backed lending. This partnership allows bitwise to leverage Maple's on-chain lending solutions, which provide real-time risk assessment and instant settlement. Maple's lending model primarily focuses on over-collateralized loans, moving away from under-collateralized lending due to market risks. The platform has also introduced structured financial products tailored to institutional investors, such as the "Lend + Long" product, which combines high-yield lending with Bitcoin options strategies. Additionally, Maple launched Maple Direct in 2023, a direct lending arm catering to institutional borrowers.
Bitwise's investment in on-chain credit through Maple Finance reflects a broader trend of institutional adoption of DeFi lending markets as an alternative to traditional fixed-income investments. This move is part of Bitwise's broader strategy to expand its product lineup and offer diverse crypto investment solutions. The firm has recently filed for multiple crypto-based ETFs and raised significant funding in a round backed by prominent investors. With this partnership, Bitwise aims to provide its institutional clients with yield-generating investment opportunities in the rapidly evolving DeFi landscape.
Crypto lending is a complex industry that has seen several bankruptcies, including those of centralized credit firms. Bringing lending activities on-chain increases transparency and reduces the risks associated with human bias during defaults. Maple Finance has delivered fairly consistent, risk-adjusted yields since its launch in 2021. The protocol has about $620 million in total value locked, and it segregates pools to cater to different risk appetites, allowing investors to choose between Bitcoin and ETH-backed loans or loans against other digital assets like Solana or XRP.
Bitwise, founded in 2017, manages a suite of index funds and actively managed investment products, including ETFs, separately managed accounts, private funds, and staking products. The company serves thousands of financial advisors, family offices, and institutional investors, and it claims to manage $1 