M11 Credit Update on Orthogonal Trading
Below is an update on Orthogonal Trading and the recent actions that have been taken in on-chain enforcement and off-chain processes.
On-chain:
On 13 December 2022, M11 Credit declared default on-chain on the following Orthogonal Trading loans:
All loan and default details are visible on the Maple WebApp:
The total value of the defaults declared with liquidation of First Loss Capital were:
The impairment values provided are a direct reflection of the on-chain transactions performed using Maple’s smart contract infrastructure. The Maple team supported simulating these transactions prior to executing on mainnet to ensure M11 Credit had clarity on the final position for Lenders in our pools.
First Loss Capital Liquidation:
Due to the cutover to Maple 2.0 and the changes from Pool Cover to First Loss Capital we want to provide clarity on the actions that we have taken to ensure an equitable amount of M11 credit’s capital was liquidated prior to any Lender capital.
- All capital deposited through a Balancer Pool into Pool Cover was withdrawn representing
- M11 Credit — USDC — 463,650 USDC and 121,292 MPL
- M11 Credit — wETH — 56.64 wETH and 19,438 MPL
2. All USDC and wETH were immediately transferred into First Loss Capital in our respective Maple 2.0 pools and liquidated in full when the defaults on Orthogonal Trading loans were called
3. For our MPL redeemed from Pool Cover we will be airdropping these balances to each Lender in the pool based on their lending position at the time default was called. The airdrop will be processed before 23 December 2022.
Maple’s treasury was also contributing capital to M11 Credit — USDC. They received 151,933 USDC and 39,518 MPL from their withdrawal from Pool Cover. The USDC was contributed to First Loss Capital in our USDC 2.0 pool and was liquidated in full upon defaulting Orthogonal Trading loans. Their MPL received from withdrawal will be contributed to the airdrop that we process.
The other Pool Cover provider in M11 Credit — wETH (7.6 wETH and 2,649.36 MPL) also contributed their capital to First Loss and will contribute their MPL to the airdrop.
The above process was simulated prior to execution to ensure that the amount of our capital that would have been liquidated in 1.0 Pool Cover was no less than the amount liquidated in 2.0 First Loss Capital. We have elected to airdrop the MPL to all impacted Lenders based on feedback from the community and enabling each Lender to participate in the potential upside of the MPL token in the long term. We believe in the Maple team, the infrastructure they’re building and their ability to execute on their long term vision.
Withdrawals:
Withdrawal requests will now be processed using the new functionality available with Maple 2.0. The main benefits of this update are that no Lender will be treated differently from other Lenders. In the event that there is no sufficient liquidity in a pool it will be pro rata shared amongst all Lenders requesting to withdraw. The below outlines the timeline for withdrawals for all of our pools:
- Lenders will be able to request to withdraw prior to 10am ET Friday 16 December 2022
- Lenders who request to withdraw prior to 11am 16 December 2022 will be able to withdraw from their pool between 11am Wednesday 21 December 2022 and 11am ET Friday 23 December 2022
- Each subsequent request period will be open for 5 days
To withdraw, Lenders should visit the Maple WebApp and request to withdraw for the next available period.
Off-chain Enforcement:
The legal process for recovery against Orthogonal Trading continues, and we have made significant progress this week. We will have a more material update on this process and the steps being taken by early next week.
