🍁 Maple Leafs Orthogonal Behind

Market Meditations | December 7, 2022

Things are staying tough in DeFi. Lending tech platform and popular yield farming destination Maple Finance cut ties with one of its most popular pool providers due to concerns over the inability to pay back an outstanding loan.

  • On Monday, Maple Finance posted an article on its website revealing that over the last 4 weeks Orthogonal Trading misrepresented its financial position to M11 Credit, and is “effectively insolvent”. 
  • Orthogonal Trading’s current liabilities total $31 million spread across 4 loans using the M11 Credit USDC pool previously listed on Maple.Finance.
  • The team at Maple was careful to draw a distinction between Orthogonal Credit and the trading arm of the organization, saying that no lenders in the Orthogonal Credit pool would be impacted as a result of the separation.
  • M11 Credit acts as a delegate on Maple Finance to provide lending to parties seeking financing. Delegates fund Maple pools with capital and are responsible for executing due diligence on those who borrow.

It was only after weeks of Orthogonal Trading insisting their exposure to FTX was minimal that the trading firm finally admitted to M11 Credit that the position was much larger than represented and was, in fact, the primary reason behind failing to make payments.