- Sid Powell is the co-founder of crypto lending protocol Maple Finance, which has issued over $1.2 billion in loans since May 2021.
- Powell explains how the decentralized loan market connects capital to small businesses.
- He also shares some of his biggest takeaways after being on the road for the past seven months.
As Crypto Bahamas conference attendees relaxed by the pool after four days of non-stop panels, meetings and parties, Sid Powell was already preparing to head to Los Angeles for another crypto gathering.
Powell, who was originally based in Sydney, Australia, has been on the road for seven months. The co-founder of decentralized lending marketplace Maple Finance lived the ‘digital nomad’ lifestyle as he tried to break into the crypto conference circuit for his fledgling startup, which launched on the Ethereum blockchain in May. 2021.
Soon Powell said he would move to Miami, Florida. The city, which has become a crypto hub in the United States, recently hosted the Bitcoin 2022 conference and is now home to the laser-beaming Miami Bull.
Traveling as much as he does, Powell learned the importance of having “some semblance of routine” in order to stay productive and focused. He said he tries to maintain a balance by always training in a gym and staying in touch with friends and family no matter where he is.
“It’s very hard to maintain, but if you have a few habits or things that are good for you, it’s good to stay grounded,” he told Insider during a Crypto conference interview. Bahamas.
So far, his productivity has contributed to Maple Finance’s rapid growth. Since its debut last May, the crypto lending market has generated over $1.2 billion in loans and attracted over $900 million in total value locked up in the platform, according to the company.
“When you’re on the conference circuit going to parties, it can seem like you’re doing work,” he said. “Building networks is important, but you can never forget that the real work is done when you go back to the computer and send emails, or give instructions to your team, or interview people. people to hire them.”
A Shopify-like platform for lending businesses
Powell, who started his career working in debt capital markets, entered the crypto space after discovering smart contracts in 2018.
“I was fascinated by the idea that you could have programmable loans and programmable debts,” he recalls. Powell said he was immediately inspired to think about how they could be applied to improve manual processes within banks where loans are typically arranged over the phone and reporting is done via a spreadsheet by analysts. .
In 2019, he authored the whitepaper for Maple Finance (MPL) with co-founder Joe Flanagan. Together, the duo invested around $150,000 of their life savings in the startup, which they envision as a Shopify-like platform that “provides tools for running a blockchain lending business.”
The platform aggregates capital from hundreds of lenders, who deposit their crypto into a diverse pool to earn denominated interest in the pool.
asset, which can be wrapped in ether (wETH) or USD stablecoin (USDC).
Borrowers go through a pool-specific underwriting process before receiving their loans, which are denominated in USDC stablecoin. “Pool Delegates,” who appoint experts licensed to manage loan pools on the Maple platform, are responsible for underwriting, due diligence, and credit analysis.
“I think platforms are very hard to get right, but if we get them right, they scale much faster,” Powell said.
He adds that Maple’s mostly institutional client base also helps scale the platform given the volume associated with larger transactions and the time it takes to assess borrowers. For example, Maple launched a loan pool with BlockTower and Genesis to provide over $100 million in loans to quantitative trading boutique Alameda Research.
While the platform has been criticized for going against the crypto ethics of decentralization given that it complies with know-your-customer and anti-money laundering standards, Powell said that the delegates of the pool manage their loan activities autonomously on the platform.
“The end goal is for Maple to be large enough that no individual default is systemically risky,” he said. “If you look at an individual pool and it’s the delegate giving the approval, it looks centralized. If you look at it as a whole, you could have 30 different loan pools that no delegate has any impact on on the overall system, which is important for resilience.”
Going live on solana in preparation for the multi-channel world
Last week, Maple Finance launched as the first sub-collateralized lending protocol on the solana blockchain. The launch allows institutions to allocate capital to a pool of loans, which will be syndicated and issued as loans to borrowers in the solana ecosystem.
Powell said he wanted to expand to solana because “the future is multi-chain” and transaction fees have sometimes become prohibitive on the Ethereum blockchain. Of course, solana has suffered a wave of outages since launch, and the trader has complained about transactions being dropped due to network congestion.
“We looked at this ecosystem that was thriving and growing and had very energetic founders, and we were drawn to that,” he said. “We also see that there was actually an opportunity for us to step in because I think every ecosystem needs under-collateralized borrowing to be able to have corporate participation.”
So far, X-Margin is the first “pool delegate” to join the platform, managing an initial loan pool of $45 million, which includes $20 million from CoinShares and $10 million from the vendor. of Circle stablecoins as well as funds from DAOs and Solana investors. . The pool, denominated in solana USDC, is open to deposits of $5 million from users and has an annual percentage yield on loans of 6.3% (as of May 3), according to the company.
“We want to go where we think borrowers, lenders and our customers want to access us and where we can actually add value,” he said. “We don’t want to be pegged to a certain tech stack. We want to be fluid and able to scale as a startup because the space is changing so quickly.”