Maple Finance, a major DeFi lender, has created a capacity pool of $300 million for Bitcoin miners.
This development is despite the steep decline in BTC’s value and the decreased capital injection into the mining sector.
Maple opens $300 million fully-collateralized lending pool
The new fund will target “public and private blue chip bitcoin mining companies and digital asset infrastructure businesses” in North America and Australia, according to an announcement made Tuesday, September 20, 2022.
Today @IcebreakerDeFi joined Maple and opened a $300M capacity pool for secured debt financing of blue-chip Bitcoin mining companies and digital asset infrastructure businesses. pic.twitter.com/ZWyLV2P9hr
— Maple (@maplefinance), September 20, 2022
The pool provides underlying loans with a term of 12-18months and an interest rate of 15-20%. The loans will be administered via Maple’s platform by Icebreaker Finance, an Australian financial services company. The balance sheet strength, financial performance, and operational efficiency of the borrower will all be considered when funding is granted.
Additionally, loans can be secured with either digital assets or real-world assets such as power transformers and mining rigs.
Glyn Jones, Icebreaker Finance CEO and founder, commented on the most recent development.
The market is beginning to realize that SPV ASIC backed financing, even non-recourse SPV ASIC backed, can be inappropriate due to the volatility of ASICs. A more varied security package is needed. Maple’s on-chain lending toolkit allows us to better align incentives for lenders and borrowers in order to make loans on-chain. We can also offer terms that reflect the evolving nature of the industry.
Financing woes for Bitcoin miners
This news comes amid turbulent times for bitcoin miners when it comes to securing funding for their operations. Mining firms have struggled to get loans and repay creditors in the crypto bear market.
Bitcoin miners struggled to repay loans of $4 billion in June. These loans were backed by equipment. CryptoPotato reported that Core Scientific, a Bitcoin miner, sold more than 7,000 BTC last June, at an average price $23,000 per coin. This left the company with 1,959 BTC.
Later, the company reached an agreement with B. Riley to purchase $100 million of Core Scientific common stock over the next two years.
Sidney Powell, Maple Finance CEO and co-founder, said:
“Recent market headwinds caused lenders to pull back while traditional financing vehicles were slower to engage in this sector. We are proud to offer a new financing vehicle that allows us to direct capital to the areas most in need. Miners play an important role in the growth of the crypto ecosystem and local economies.
CryptoPotato’s first article was “Maple Finance and Icebreaker Launch Lending Pool for Bitcoin Miners”
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