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In a recent Twitter report, Maple Finance has stated it faces a shortage of funds as more lenders make withdrawals. The crypto credit firm acknowledges it may experience cash shortages from its pools.
Waiting on Borrowers
In a bid to meet demands made by many lenders, Maple finance has found itself in a fix. The lack of funds due to many lenders making withdrawals has resulted in the current problem. To alleviate the issue, Maple announced that from 06/20/22, is expected to face more problems via shortages in its pools. According to the report, the move to make withdrawals has left most pools empty. As a result, lenders will have to wait for capital to increase in order to complete their withdrawals.
According to Maple, lenders will have to wait for new deposits and borrowers to pay back in order to complete their withdrawals. Maple explained that loans will be maturing in the coming weeks, hence, borrowers will make repayments. The repayments are set to increase capital in the pools which will, in turn, allow lenders to make their withdrawals. The credit firm then proceeded to outline that during this same period, lenders will still earn from interest and MPL rewards.
A Series of Unfortunate Events
The crypto crash has resulted in several trends as more people flock to cash out before things get worse. Crypto prices have dipped dangerously with losses being recorded across the board as prices keep dropping. Of these outcomes, withdrawing assets has become the most direct option for crypto users.
These withdrawals have in turn affected many financial institutions operating in the crypto space. Maple finance is the latest credit institution to face this problem as more people rush to cash out on their investments. However, the process has not been as straightforward as many expected.
Crashes involving Three Arrows Capital and Celcius are noted to have a role in the rush to cash out by lenders. The crash of the finance firm prompted a flurry of panic in the crypto community. As many users were left reeling in the aftermath, many lenders were also eager to withdraw their funds. This wave of panic prompted lenders to empty the firm’s pools in record time.
However, Maple Finance has made a statement to reassure lenders and clear any impending fears they may have. In the statement issued earlier in the month, Maple stated that borrowers and lenders on its platform were protected from the risk posed by the crashing of the two credit institutions mentioned above. Maple attributed this low risk to borrowers having market/delta neutral and trade market volatility.
Additionally, the firm expounded on its relationship with Celsius. Maple clarified the relationship by stating that Celsius does not borrow from it and instead limits borrowing to its own pools. The move is set to be followed up by frequent updates in order to alleviate existing tension in the market.