Following the default on Orthogonal Trading’s M11 loan, decentralized insurance protocol Nexus Mutual has withdrawn all assets from Maple Finance due to an expected loss of around $3 million.
In early May, Nexus community members unanimously voted Allocate approximately 15,348 ETH to Maple’s M11 credit pool. However, the collapse of FTX has created a huge liquidity crisis for pool borrowers, including Auros and Orthogonal Trading.
auros had notification M11 acknowledged on December 1 that it was facing short-term liquidity issues that could affect its ability to keep up with its repayment schedule. M11 Credit worked to rebuild Auros repayment at a later date.
However, Orthogonal Trading misrepresented its financial exposure to FTX, resulting in a loan default of $31 million.As a result, maple announced On October 5, it was announced that it had severed all business ties with Orthogonal Trading due to perceived fraud and insolvency concerns.
Following Maple Finance update on Orthogonal Trading loans, Nexus Mutual notification Investors expect to suffer a loss of approximately 2,461 ETH (approximately $3 million), equivalent to approximately 1.6% of total assets.
Meanwhile, Nexus Mutual said it has initiated the withdrawal process of its remaining assets (approximately 12,887 ETH) from its M11 credit pool. Funds will be transferred to Nexus after a 10 day waiting period.
Nexus Mutual added that the loss would not affect its day-to-day operations as it remains “liquid” to pay its customers’ bills.