Aave Launches Permissioned DeFi Platform Geared For Institutions
Aave has launched its permissioned DeFi platform for institutions, with Fireblocks being first whitelister of the platform to approve institutions that want to take part.
On January 5, Aave – the open-source non-custodial decentralized finance (DeFi) lending platform – launched a permissioned version of the protocol aimed at institutions. The platform called Aave Arc will leverage Fireblocks as the first whitelister as the platform aims to help bridge traditional financial institutions with defi.
Aave is a popular DeFi lending platform and the DeFi protocol has the third-largest total-value locked (TVL) today. Metrics show that Aave has a $14.52 billion TVL spread across three blockchains including Ethereum, Avalanche, and Polygon.
At launch, Fireblocks has whitelisted 30 institutions to participate on Aave Arc. These include SEBA Bank, Bluefire Capital (acquired by Galaxy Digital), Celsius, CoinShares, GSR, Ribbit Capital, QCP Capital, and Wintermute.
Aave Arc will initially support four assets: ether (ETH), wrapped bitcoin (WBTC), the USDC stablecoin, and Aave’s native token AAVE.
Aave revealed the Aave Arc concept in July 2021, and in mid-November it was announced 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.”
While Fireblocks is the first whitelister of Aave Arc, more entities are expected to join as a whitelister of the platform. Last month, Securitize made a proposal to Aave’s governance forum for it to be the next whitelister.
“Additional whitelisters for Aave Arc will help facilitate market participants’ choice of onboarding onto Aave Arc via one or more whitelister,” said Aave founder and CEO Stani Kulechov.
“Aave Arc is a permissioned market based on the Aave V2 market,” Aave said at the time. “In the spirit of innovation and experimentation, Aave Arc creates a Web3-native experience for financial institutions to harness the power of defi in a permissioned sandbox environment.”
True to the values of defi, Aave Arc is designed to be fully decentralized and governed by Aave Governance, according to the company. ‘Whitelisters’ that KYC and onboard institutions and corporations onto Aave Arc can be appointed or removed by Aave protocol governance.
Essentially, the new platform allows traditional finance companies to participate with the Aave system but leverage a permissioned liquidity pool. The crypto custody firm Fireblocks believes that more institutions will embrace cryptocurrency and the belief is the company’s top prediction for 2022. “Institutional interest in crypto will accelerate in 2022,” Fireblocks says 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 around $3.47 billion on January 5, 2022, and $294 million in global trade volume. Weekly stats show AAVE is up over a percent, two-week metrics indicate the asset has gained 38.1% and year to date, AAVE has gained 135%.
