A new Borrower will create a Request for Quote (RFQ) for a loan. The RFQ is funnelled to Pool Delegates who initiate a conversation on terms and due diligence requirements. Typically this would involve a review of the Borrowing fund's reputation, management's background, fund strategy, potentially a statement of current positions or NAV in the case of externally administered funds. The Borrower's RFQ will propose terms and the Pool Delegate may make a counter-offer.
If agreement is reached then the Borrower will create the on-chain loan request and the Pool Delegate can transfer all or part of the amount from their Liquidity Pool.
The Pool Delegate should be mindful of having sufficient stablecoin balance in the Liquidity Pool to meet expected withdrawals by Liquidity Providers. It is advised against being fully invested for this reason.
If a Borrower misses their repayments, their collateral can be liquidated by the Maple smart contracts after a grace period by being sent to an AMM. For less liquid collateral or large amounts that would incur slippage, the Pool Delegate may privately sell the collateral OTC to get the best price and transfer the proceeds back to the Liquidity Pool.