On May 28, Maple Finance, an institutional lending platform in decentralized finance (DeFi), launched a new protocol named Syrup. Designed to provide institutional yield to the DeFi community, Syrup allows users to engage in secured institutional lending by depositing Circle’s USD Coin (USDC) and receiving syrupUSDC liquidity pool (LP) tokens in return.
Context of the Launch
The launch of Syrup comes in the wake of significant challenges for Maple Finance following the collapse of FTX-Alameda. In December 2022, Maple Finance severed ties with Orthogonal Trading, which had defaulted on $36 million in loans due to exposure to FTX-related entities. These defaults impacted Maple’s lending pools, resulting in notable losses for lenders on the platform.
Features of Syrup
Syrup offers permissionless access to secured institutional lending, with loans fully collateralized and directed towards major crypto institutions to generate yield. Despite this, some community members remain skeptical about the new protocol given Maple Finance’s recent history with loan defaults linked to FTX.
Community Reactions
The launch has elicited mixed reactions within the DeFi community. Some users have questioned the necessity of introducing a new token and the overall need for Syrup. Concerns about anti-money laundering (AML) and know your customer (KYC) processes were also raised, with one user summarizing the general sentiment by highlighting the risks associated with permissionless pools lacking AML and KYC compliance.
Also Read: Uniswap Postpones Protocol Upgrade Vote; UNI Drops 9%
MPL Token Migration
Alongside Syrup, Maple Finance introduced the Syrup (SYRUP) token, allowing holders to stake and participate in the ecosystem. Holders of Maple’s native Maple (MPL) token can migrate to SYRUP on a one-for-one basis without additional dilution. This decision has sparked questions among users about the necessity of creating a new token instead of leveraging the existing MPL token.
In response to these concerns, Syrup.fi clarified that SYRUP is simply the name for the upgraded MPLv2 token. Maple Finance will host a webinar on June 4 at 7:00 pm UTC to further explain the details and address any questions regarding the Syrup launch.
