Maple Finance Floats $300M Lending Pool for Bitcoin Miners

Maple Finance in collaboration with Australian financial services firm Icebreaker Finance has launched a liquidity pool worth $300 million for certified Bitcoin miners. 

According to the announcement shared by the Australian-based DeFi lender, Icebreaker Finance will administer these funds using Maple’s platform.

The fund will be available to entities in North America, Canada, and Australia that meet treasury management and power strategies standards.

The loan offered on the basis of priority has a tenure range from 12 to 18 months with an interest rate charged between 15 to 20% with real-world assets like mining rigs or digital assets used as collateral to secure the loans. Qualified firms will be selected based on the strength of their balance sheet, operational efficiency as well as financial performance.

Since May 2021, Maple has provided loans of about $1.8 billion to accredited institutions. This offer makes it the first time the platform is offering full real-world asset collateralized loans.

A difficult period for crypto miners

The new fund is coming at a time when the market conditions and increase in energy prices have forced lenders to pull back from the sector. Traditional financing instruments have also been reluctant to engage the crypto mining sector – which plays an essential role in the growth of the crypto ecosystem. 

The continuous fall of the market price for bitcoin has made the venture less attractive. Many crypto miners like Argo and Bitfarm resorted to selling their bitcoin holdings and mining equipment to repay borrowed loans. 

Recall that Bitfarms, a self-mining firm in its Q2 financial reports posted a $142 million net loss after it mined an additional 1257 BTC. During this period, the firm sold 3,357 BTC for an aggregate of $69.3 to offset a part of its bitcoin-backed loan abandoning its HODLing strategy.

The $300 million fund will breathe new life into the crypto mining sector that has already been dealt a blow by the market crisis. The platform will also benefit from the loan interest charged on these loans.

UK-based cryptocurrency miner Argo also sold a portion of its bitcoin holdings to lower its obligations from a loan it secured from Galaxy Digital.