Popular decentralized lending platform Aave has launched Aave Arc, a permission lending and liquidity service. Aave Arc aims to help institutions participate in regulation-compliant DeFi.
Unlike permissionless cross-chain counterparts, Aave Arc is specifically designed for institutions that have to maintain regulatory compliance in DeFi space. As of now, 30 entities have signed up for the whitelist of this service.
Users of this service will have to perform procedures such as knowing your customer/anti-money laundering (KYC/AML) to gain access.
Aave is taking help from Fireblocks, which serves as a whitelisting agent for Aave Arc. On the other hand, Fireblocks is an institutional digital asset custodian that “enables whitelisted institutions to securely participate in DeFi as liquidity suppliers and borrowers.”
According to them, Fireblocks has already approved “30 financial institutions”. All these institutions will participate on Aave Arc as suppliers, borrowers, and liquidators.
The list of whitelisted entities includes Anubi Capital, Canvas Digital, CoinShares, GSR, and Celsius.
Aave with its new offering is aiming to onboard more institutions to the DeFi space. Currently, the DeFi space has a total value locked (TVL) of about $133 billion. However, according to DappRadar, that number has grown 4.5 times since 10th January 2021.
On the other hand, institutions are increasingly buying substantial sums of crypto in 2021. In November last year, Silvergate partnered up with Crypto.com to enable institutions to buy/sell crypto with USD. Basically, Crypto.com assisted in allowing institutional investors to perform bank transfers from its Crypto.com exchange.
Previously, Crypto.com had launched withdrawals through USD bank transfers in more than 60 countries. They did so via the incorporation of Circle API.