DeFi Lending Industry Adapts to Risk Management Post-3AC Collapse
Decentralized finance (DeFi) lending has undergone significant changes, particularly in the aftermath of major company failures like Three Arrows Capital (3AC) in the previous year.
According to Sidney Powell, CEO of Maple Finance, risk management is now a crucial factor for the industry’s success. Borrowers and lenders are prioritizing stable returns over speculative gains, with an emphasis on risk-adjusted yield rather than absolute yield. Attributing this shift to the lessons learned from the collapse of 3AC and a more cautious approach to counterparty risk management.
Maple Finance, known for providing undercollateralized loans on-chain, has adapted to these changes, offering overcollateralized loans through Maple Direct following the collapse of major crypto lenders. Powell also highlights the advantages of tokenizing debt over equities due to its easier monitoring and transparency.
Clever Robot News Desk 29th September 2023
