What Is Maple Finance, Syrup.Fi and the SYRUP Token

What Is Maple Finance?

Maple is DeFi's Institutional Lender, and Syrup makes Maple’s consistent high yield available in DeFi. The SYRUP token governs the Maple and Syrup ecosystem and holders can stake their SYRUP to participate in the growth of the ecosystem.

Key Takeaways

• Maple Finance is a decentralized finance platform designed for institutional lending.

• Maple’s permissioned marketplace enables accredited investors and institutions to earn yield on their digital assets and enables institutional borrowers to unlock liquidity through fixed-rate overcollateralized loans.

• Maple launched Syrup for a DeFi-native audience, enabling anyone to access yield generated by Maple’s digital asset lending platform.

• Maple has grown TVL by more than 6X in the last year to >$600M to become the largest institutional DeFi platform.  

• The SYRUP token was launched on November 13, 2024 and MPL holders can migrate over at a conversion ratio of 1 MPL to 100 SYRUP. 

Maple aims to improve upon legacy capital markets by combining industry-standard compliance with transparent and frictionless lending enabled by blockchain technology and smart contracts. While Maple is focused on institutional lending and borrowing, it has also released Syrup, which aims to make consistent institutional yields available to anyone in DeFi. 

With yield generated by Maple’s digital asset lending platform that provides fixed-rate, overcollateralized loans to institutional borrowers, lenders on Syrup and Maple enjoy consistent yield outperformance relative to leading DeFi lending protocols, such as Aave, by 5-10% APY.

According to Joe Flanagan, co-founder of Maple Finance: 

“Financial markets continue this essential function, providing the capital needed for humanity’s greatest innovations—from renewable energy to artificial intelligence and space exploration. Maple builds on this tradition, using blockchain technology to modernize institutional credit, making lending faster, more transparent, and more efficient. By facilitating access to capital, Maple empowers entrepreneurs and innovators to build the future and solve the challenges that matter most.”

Introduction to Maple Finance

Maple Finance was launched over three years ago, and is an institutional DeFi platform that brings the benefits of transparency and verifiability from blockchain technology to institutional lending. In this way, Maple is an established RWA protocol, facilitating over $5 billion in onchain private credit.

Maple’s digital asset lending platform sources yield from secured loans to institutions, and the Syrup protocol provides broader access to these institutional yield opportunities. All loans from Maple and Syrup pools are fully backed by select digital assets, which undergo rigorous risk assessment. Further, the permissioned nature of the yield source ensures both security and quality. 

Maple’s Blue Chip Secured lending pool provides the security of only accepting BTC and ETH collateral, held in qualified custody. Maple High Yield Secured generates a higher yield by underwriting loans backed by select digital assets and reinvesting the collateral in staking and/or secured lending opportunities; Syrup yield is derived from a blend of both. 

In what has been a positive year for the project, Maple Finance has reported significant overall growth in 2024. There are 700 active institutional lenders, with 1,500% year on year growth, and half of existing Maple lenders have tripled their positions. On the borrower side, there are over 85 institutional borrowers. TVL on the platform has also grown to over $546 million, with over $5 billion in loans originated and over $61 million in interest paid to liquidity providers. 

To reduce risks, Maple facilitates overcollateralized lending. If a borrower defaults, collateral assets will be liquidated to protect the lender principal. 

How Does Maple Finance Work?

Now, let’s look at how Maple Finance works:

Lenders (Liquidity Providers)

Maple pools generate above-market yields for lenders by issuing secured loans to institutions, overcollateralized by liquid digital assets. Yield generation is enhanced through liquid and native staking, with full transparency provided to lenders. Lenders can choose the pool(s) they want to deposit capital in based on factors like historical performance and the underlying collateral.

Rigorous borrower underwriting and detailed collateral analysis ensure robust risk management and capital preservation; continuous monitoring and advanced alert systems enable swift margin calls and collateral liquidation to protect lender funds. 

Borrowers

Borrowers are institutions that are looking to access liquidity from Maple’s institutional lending marketplace. Before any borrower is approved to access financing on Maple or Syrup, they must complete KYC/AML checks and go through a rigorous underwriting process. Further, before any collateral is accepted as eligible, the asset itself also goes through an in-depth approval process. Once internal approvals on the underwrite and collateral type have been met, the team sets tailored terms for the borrower. These terms include eligible collateral assets, LTV thresholds etc.

All collateral is held with institutional grade custody solutions (e.g. Anchorage, BitGo, Zodia), and Maple provides onchain addresses for lenders to verify the collateral details for each outstanding loan.

Once a loan is live, internal risk assessment and active collateral management ensure there are no significant changes to borrower financial health or collateral liquidity. The Maple Direct team actively manages the health of the loan book through margin calls and liquidation levels, always set conservatively above 100% collateralization to protect lender funds. 

Now, let’s look at how Syrup opens up yield on Maple to the wider DeFi audience.

What Is Syrup?

Syrup is a permissionless yield protocol powered by Maple Finance for a DeFi-native audience. By depositing funds on the protocol, users can access yield sourced from fixed-rate overcollateralized term loans to leading crypto-native institutions. As Syrup is a DeFi protocol, no KYC is required for lenders who wish to deposit funds and start earning yield. The collateral for the underlying loans is verifiable onchain in real-time using the Syrup webapp.

In addition to yield from depositing funds, users will also earn Drips, which are the primary mechanism for distributing ownership in the Maple ecosystem. Drips are distributed to users in Seasons. At the end of each Season, the conversion of Drips to SYRUP is announced. 

Users can perform actions that will increase their base rate of earning Drips rewards, such as by depositing into Syrup using one of their wallet integration partners or leveraging syrupUSDC throughout DeFi. These small actions translate directly into boosted rewards for users.

In addition to these incentives and enhancements, depositors can also boost their Drip rewards by taking a more substantial stake in the Syrup ecosystem:

• A 3-month capital commitment to the Syrup platform will earn a 1.5x multiplier on the user’s base rate.

• A 6-month capital commitment would ensure a 3x multiplier on the user’s base rate.

Users will be able to begin claiming their Drips rewards through the Syrup webapp starting 15 December. Drips will be convertible to SYRUP in phases, starting with Season 1, with subsequent Seasons’ Drips made available in subsequent months.

What Is the SYRUP Token?

SYRUP is the token that governs the entire Maple ecosystem, across both Maple and Syrup. As mentioned above, Syrup users will earn Drips that will be converted to SYRUP token. SYRUP can also be converted to staked SYRUP (stSYRUP), enabling token holders to share in the growth of the ecosystem and earn even more rewards.

SYRUP replaces the older MPL token, and MPL holders are required to convert their tokens through the MPL-SYRUP conversion process, which is outlined in the official Syrup docs. 

Migration of MPL to SYRUP & Staking Rewards

The migration to SYRUP is designed to enable the community to share in the growth of the Maple and Syrup ecosystem. The migration process will enable MPL holders to convert their MPL tokens to SYRUP at a ratio of 1:100.

To convert MPL to SYRUP from a wallet, users can visit Syrup.fi/convert to one-click convert directly from MPL to staked SYRUP (stSYRUP). While staking is the default option, it is not mandatory. 

Users converting their MPL to SYRUP on an exchange must comply with each exchange’s MPL to SYRUP conversion processes. 

In the first 90 days after token launch, 5,000,000 SYRUP will be distributed to stakers, and stakers will earn ~9% APY assuming 1/4 of circulating supply is staked. The Maple protocol will distribute SYRUP rewards as a combination of scheduled increase in the SYRUP token supply and SYRUP token buybacks.

Final Thoughts

Maple and Syrup bring institutional lending onchain, and make the yield available to both DeFi natives and accredited investors. Borrowers can easily access loans needed for growth, while lenders earn yield on overcollateralized loans.

As an onchain loan facility, they are onboarding institutions to onchain credit markets and providing differentiated yield to the DeFi ecosystem. The Maple ecosystem has experienced significant growth in the past 12 months – a testament to the growing institutional demand for onchain credit.

Disclaimer: This article is only meant for informational purposes and should not be taken as financial or investment advice. Always do your own research on any protocol before depositing funds.