Sherlock thinks that the bad loans on Maple Finance will cost its investors $4 million.
They have put $5 million from its staking pool in USDC into Maple’s credit pool before.
A crypto auditing platform, thinks that the troubled loans on Maple Finance. A blockchain-based marketplace for institutional capital, will cause a huge loss.
Sherlock said that loan defaults on Maple Finance caused by Orthogonal Trading FTX would cause its stakers to lose $4 million. Or about one-third of the capital in its staking pool.
The platform said that it put $5 million USDC from its $12 million staking pool into the credit pool Maple which is managed by M11 Credit in August.
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Will Stakers lose a lot of money?
Due to the bankruptcy of Orthogonal Trading, $31 million in credit pool loans were not paid this week. 80% of the loans that are still being paid back are bad debt. But when Sherlock put money into the pool, Orthogonal’s loans only made up 14% of the pool’s total loans.
Sherlock also said that the disproportionate weight of Orthogonal Trading in the loan book was “one of the main reasons why Sherlock’s losses are so big.”
Sherlock says that when FTX crashed in November. The platform attempted to withdraw funds from the Maple credit pool. But was unable to do so due to the ongoing 90-day lockup on fresh deposits. Also, when the lock-up period was over, the company started taking the money out. When Orthogonal Trading stopped paying on December 5. It was halfway through the 10-day waiting period before assets could be taken back said Sherlock.
Due to the ongoing 90-day lockup on new deposits, the platform tried to withdraw money from the Maple credit pool but was unsuccessful.
He also said: “Due to the digital assets stuck on FTX, Orthogonal Trading, a borrower and credit pool manager on Maple, experienced losses and went into default on a $36 million obligation. In addition, Maple discontinued its connections with Orthogonal after it misrepresented its financial difficulties for several weeks.”
Due to the digital assets that got stuck on FTX, Orthogonal Trading. A borrower and manager of a credit pool on Maple lost money and didn’t pay a $36 million debt. Also, Maple cut ties with Orthogonal after it lied for several weeks about having money problems.
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