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Maple Finance co-founder and CEO Sid Powell says that transparency has been the saving grace of decentralized finance (DeFi) amid the prolonged crypto market slump.

Speaking to Cointelegraph on the sidelines of the Converge22 conference in San Francisco, Powell noted that, throughout the crypto winter, DeFi has continued to operate as intended while centralized finance (CeFi) has become “pretty inactive.”

Powell suggested that during the market crash, CeFi lenders hadn’t properly “battle-tested” and weren’t “prepared to liquidate clients,” prioritizing maintaining client relationships.

“As the price of Bitcoin was tumbling, they didn’t want to be sending out margin call letters or email hundreds of clients because they wanted to maintain client relationships,” Powell explained, adding:

“So, you give them a little bit longer, a little bit longer — well, suddenly a lot of these loans are underwater, particularly the ones that started on or [were] undercollateralized.”

He notes that where CeFi firms are still lending, “they’re doing so on a 1:1 collateralization.”

On the other hand, “DeFi is much more transparent,” he explained. In overcollateralized DeFi models, “people just got liquidated as BTC and ETH dropped. That happened automatically.”

“In DeFi you can’t get away with letting one borrower be half of a lending pool because people see that and they question the risk management there,” Powell said. “All of the loans are visible, so you had to be much more careful of who you underwrote and how you underwrote them.”

Powell also added that CeFi businesses were diversified with trading and prime brokerage, which they thought was a strength, but all of their business lines impacted each other:

“But if a CeFi lender ran a pool on Maple, that pool would not be affected by what is happening in the trading part of that business. […] It’s restricted and siloed to just the lending activity.”

Related: Decentralized finance faces multiple barriers to mainstream adoption

Maple is a decentralized finance credit platform that claims to hold 50% of the institutional crypto lending market as measured by total loans outstanding and has issued close to $1.8 billion worth of loans since its inception in May 2021.

The Maple loan book “seriously outperformed CeFi,” Powell said, “with only one $10 million default on $1.8 billion of loans originated and 900 [loans] outstanding at the time.”

Powell described Maple Finance as “a venue for people to run lending pools,” but said there has been a reduced appetite to lend since June, causing prices for lending to go up from 8-9% to 10-13%, and thus crypto whales and yield aggregators have started to allocate again to lending platforms like Maple.