Executive Summary
Maple is excited to introduce the Cash Management Pool (MPLcashUSDC) to the ENS community, with the goal of ENS allocating a portion of its existing Endowment funds to MPLcashUSDC.
Maple has proactively engaged with Karpatkey and Steakhouse in the months leading up to this post and would like to begin engaging with the broader ENS community to advance the discussion around MPLcashUSDC. In order for ENS Endowment to allocate to this strategy, the Cash Management Pool will first need to be added as an approved permission granted to Karpatkey as the ENS Endowment fund manager.
Background
This post addresses the ENS Endowment initiated in early 2023 and builds on Karpatkey’s recent EP4.1 which introduces additional actions and strategies for the ENS Endowment, seeking to “enhance the Endowment’s performance, adaptability, and diversification.” EP4.1 includes 16 new actions related to Endowment funds to be executed by the ENS DAO, including 8 new actions for the Endowment’s stablecoin portfolio – strategies deployed across Compound v2, AAVE v3, Maker DSR, Curve, Convex, and Balancer.
We appreciate Karpatkey’s detailed approach to risk management, and believe that the next natural progression is for the ENS Endowment to diversify its stablecoins into traditional assets using established protocols. With risk-free rates at the highest levels seen since 2007, we believe Karpatkey and the Endowment should look beyond their existing stablecoin yield farming strategies in order to diversify exposure, increase yield, and reduce smart contract risk. As further described herein, MPLcashUSDC offers a compelling opportunity for ENS to earn conservative, uncorrelated yield backed by US Treasury bills.
Since launching in May 2023, MPLcashUSDC has attracted greater than 25M USDC in total deposits, with greater than 50% of deposits coming from DAOs and a 4.7% net APY generated to date. Backed by US Treasury bills, the Pool targets a net APY of the current 1-month rate as reported by the US Department of the Treasury, less fees and expenses totaling 0.5% annualized. At current rates, the spot net APY of MPLcashUSDC is approximately 4.9%.
Why Maple?
Maple’s Cash Management pool is highly differentiated from competitors, including the following benefits:
- Direct Asset Security: Actively managed and directly backed by US Treasury bills held in a bankruptcy remote SPV.
- Daily Liquidity: Withdrawal function offering daily liquidity on US banking days, automated through smart contracts to ensure limited reliance on third parties.
- Short Duration: Weighted average maturity of the Pool’s assets is capped at 30 days – this restriction materially mitigates interest rate risk and ensures reliable access to daily liquidity for lenders.
- Smart Contracts: Evolved smart contract infrastructure that has supported more than $2 billion in loan originations with an LP token (MPLcashUSDC) representing the lender’s deposit atomically transferred to their wallet upon deposit. Lender deposits in the Pool are held in a non-custodial smart contract and Maple never takes possession.
- Regulated Counterparties: Custodial risks are minimized by partnering with established and regulated counterparties. The Pool’s prime broker is StoneX, a SEC and FINRA regulated broker dealer. BNP Paribas, the fifth-largest global custodian with over $10 trillion in assets under custody, is the underlying custodian for the StoneX account.
- Fully Ringfenced: As with all pools on Maple, the Cash Management Pool represents a distinct smart contract and Lenders are ringfenced from credit risk in other pools on the Maple platform. Although certain borrowers on Maple experienced credit events in the aftermath of 2022, Maple’s infrastructure consistently performed as designed and any losses were confined to their respective pools.
Next Steps
As Endowment fund manager, Karpatkey is responsible for allocating the ENS Endowment, and changes to Karpatkey’s permissions require ENS DAO approval. We propose that Karpatkey progresses due diligence alongside the Maple team to determine an appropriate initial allocation of the Endowment’s stablecoin funds to MPLCashUSDC.
Additional information covering the Cash Management Pool, including lending, withdrawing, and risks is detailed on GitBook as well as the other materials linked in Key Documents below.
Key Documents
Disclaimer
The data, statements and information presented in this post are for informational purposes only, and do not constitute financial or investment advice. This post does not constitute advice for any purpose whatsoever. The financial statements presented have not undergone a audit from a third-party professional accounting firm. As such, there may exist errors or inaccuracies that materially misstate the financial statements. We are not responsible for any financial losses or adverse outcomes that may result from making financial or investment decisions based on the data presented in this post. Further, by viewing this post you agree that the statements in this report do not constitute a representation, warranty or guaranty regarding any matter, and you are not relying thereon, and will not make any financial or investment decision based on the statements, but will conduct your own due diligence. You hereby release, waive and relinquish any and all claims, causes of action and disputes against Protocol Pool Operations Pty Ltd, Maple Labs Pty Ltd, Maple DAO or its contributors, and the creators of this post.
The forward-looking statements in this proposal are subject to numerous assumptions, risks and uncertainties which are subject to change over time. There are many risk factors, including those relating to blockchain technology generally; the development of decentralization; the uncertain regulatory environment; and Maple specifically, that could cause actual results or developments anticipated by us not to be realized or, even if substantially realized, to fail to achieve the benefits that could be expected therefrom. We reserve the right to modify our plans and intentions without prior public notice.