This is an observation and personal opinion from BonnaZhu of Nothing Research Partner. The following content does not constitute any investment advice.
Lending money to institutions for trading is indeed a straightforward direction for RWA.
In the past two months, both TVL and cryptocurrency prices have increased multiple times.
Although it is essentially still based on controlling and pumping logic.
The mechanism does provide a reason for funds to buy up:
1) Time deposits + deferred incentives create an invisible flywheel.
On Maple, you can deposit stablecoins and choose between demand deposits or fixed-term deposits. However, the token incentives for fixed terms are higher, and they are not distributed in real-time but are deferred until the end of each period. This creates a mechanism:
- The more users deposit for fixed terms, the higher the future stickiness of TVL;
- The TVL of the lending protocol is positively correlated with income, and the cryptocurrency prices are also positively anticipated;
- When cryptocurrency prices do rise, the actual APY of deferred distributions is even higher;
- Users are more inclined to choose fixed-term deposits, further increasing TVL.
Ultimately forming a flywheel where everyone hopes for rising cryptocurrency prices.
The actual APY is higher than the surface-level 6.5% + 3.5%.
2) Abandon the Curator model and switch to a composable structure.
Although lending protocols like Morpho, which adopt the curator model, have also developed well, I personally do not like this model of various pools, as it complicates the choice despite all being stablecoin deposits.
Maple simplifies this with just two pools, SyrupUSDC and SyrupUSDT. This not only facilitates liquidity aggregation and incentives, increasing attractiveness to miners (just look at how large the SyrupUSDC pool is on DEX), but also makes it easy to combine with external protocols, focusing on institutional returns; just buying SyrupUSDC is sufficient.
I believe that if Maple Finance had remained the original Curator model — initially called Pool Delegate — it would not have been able to collaborate with Aave and Kamino Finance so quickly.
3) Abandon credit lending and switch to over-collateralized fixed-rate loans.
The early Maple was focused on credit loans, which were unsecured and relied on Pool Delegate for credit assessment and risk management.
However, in 2022, the main borrower on the platform, Orthogonal Trading, suffered significant losses due to the FTX collapse, which directly pulled Maple and its depositors down with it. Now, what we see in Maple is all over-collateralized borrowing, which has increased the safety margin for depositors. Although this makes it similar to Aave, Maple offers fixed interest rates, which are quite attractive to institutions.
Moreover, users are more motivated to deposit for fixed terms, which in turn makes it easier for the Maple team to manage the duration of lendable funds.