On January 5, the open-source non-custodial decentralized finance (defi) lending platform Aave launched a permissioned version of the protocol aimed at institutions. The platform dubbed Aave Arc will leverage Fireblocks as the first whitelister as the platform aims to help bridge traditional financial institutions with defi.
KYC-Centric Defi Liquidity: Aave launches the Aave Arc authorized protocol for financial institutions
Aave on Wednesday launched an authorized platform called Aave Arc, a new protocol dedicated to financial institutions who wish to participate in the challenge in a compliant manner. Aave is a popular challenge lending platform and the Challenge Protocol has the third Total Locked Value (TVL) today. Metrics show Aave has $ 14.52 billion TVL spread across three blockchains, including Ethereum, Avalanche, and Polygon.
The crypto custody firm Fireblocks has approved 30 financial entities to join Aave Arc. The list includes firms like Ribbit Capital, Coinshares, Hidden Road, Wintermute, and Celsius. Aave revealed the Aave Arc concept in July 2021, and in mid-November it was disclosed that Fireblocks was the first whitelister. The defi startup also described how Aave Arc would work after explaining that defi was “inaccessible to traditional financial institutions.”
“Aave Arc is an authorized market based on the Aave V2 market”, Aave noted at the time. “In a spirit of innovation and experimentation, Aave Arc creates a native Web3 experience allowing financial institutions to harness the power of challenge in an authorized sandbox environment. The challenge startup added:
True to the values of defi, Aave Arc is designed to be fully decentralized and governed by Aave Governance. ‘Whitelisters’ that KYC and onboard institutions and corporations onto Aave Arc can be appointed or removed by Aave protocol governance.
Fireblocks whitelist envisions ‘institutional interest in accelerating cryptocurrency in 2022’
Essentially, the new platform allows traditional financial firms to participate in the Aave system but take advantage of an authorized liquidity pool. Cryptocurrency custodian firm Fireblocks believes more institutions will embrace cryptocurrency and the belief is the company’s main prediction for 2022. “Institutional interest in crypto will accelerate in 2022,” says Fireblocks in a blog post.
“This adoption will gain more momentum from developments in post-trade infrastructure that are currently being implemented across the marketplace,” Fireblocks 2022 prediction post adds.
Aave’s native crypto asset, aave (AAVE) has a market valuation of approximately $ 3.47 billion on January 5, 2022 and a global trade volume of $ 294 million. Weekly stats show AAVE up more than one percent, two-week metrics show asset has gained 38.1% and year-to-date AAVE has gained 135 %.
