The turbulent history of virtual currency credit.

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Maple Finance was one of the digital asset institutions impacted by the $1.5 trillion cryptocurrency crash last year. This collapse led to a series of bankruptcies, including entities like Sam Bankman Fried's FTX empire, and devastated leveraged positions in the cryptocurrency ecosystem.

The crash shook the concept of cryptocurrency lending, causing losses in the so-called decentralized lending within digital asset projects. According to DefiLlama's data, the total value of decentralized lending has risen by 120% this year, reaching approximately $22 billion. However, this is still significantly lower than the historical high of $54 billion set in April 2022.

While the digital asset industry is recovering from last year's turmoil, it faces other challenges, such as the uneven access of banks, which are cautious about the role of cryptocurrencies in illegal activities. This suspicion complicates the task of converting between digital tokens and fiat currencies. Due to the relative novelty and complexity of blockchain, traditional finance is also uncertain about digital ledgers and potential security risks.

Tom Wan, a researcher at digital asset fund provider 21.co, pointed out another obstacle. Unlike traditional finance, the crypto lending market lacks a credit rating system, hindering a comprehensive understanding of risks.

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Its history is not really something we are focused on.

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You can explore the history of virtual currencies to gain more insights.