Sam Bankman Fried’s Alameda Research has teamed up with two fintech behemoths to launch the first syndicated loan in the Defi business.
Maple Finance, a digital asset institutional capital marketplace, has teamed up with Alameda Research, a fintech investment firm, to launch Defi’s first syndicated loan. Through a single-borrower DeFi lending pool, Alameda will issue loans to authorized non-US institutions using Maple Finance’s new product.
Syndicated Loans with a Decentralized Approach
Alameda will act as the pool’s sole borrower, utilizing its high profile to secure better credit terms. CoinShares, Abra, and Ascendex are among the pool’s lenders. They’ve pledged $25 million to start, with a goal of $1 billion in a year. Two more undisclosed institutional investors contributed funds to the loan, but they are all AML/KYC compliant.
A syndicated loan is a single-borrower loan from a consortium of multiple lenders for the uninitiated. Because these loans are often in the billions of dollars, they are dispersed among numerous banks to reduce risk. As a result, banks are the most common lenders, whereas companies and governments are the most common borrowers.
For these high-grade, high-volume trades, Maple Finance specializes in providing uncollateralized financing services. Their new offering adds to the infrastructure that helps businesses borrow money and expand.
The Role of Alameda
According to Powell, the new loans have fixed interest rates in the range of 8-10 percent. Unlike other crypto-lending firms, the loan is undercollateralized, relying on Alameda‘s reputation to repay it.