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Aave opens up DeFi to institutional investors!

Tue 06 Jul 2021 ▪ 13h12 ▪ 3 min read — by Matthieu Palois

The cryptocurrency lending and borrowing platform Aave has announced that it intends to launch a version of its platform for institutional investors during this month of July.

Aave

Aave Pro launching in July

Over just four years of existence, Aave has become a major decentralised finance (DeFi) player. This project specialises in cryptocurrency lending and borrowing. Specifically, Aave allows users to invest in pools in order to provide liquidity, allowing other users to borrow cryptocurrency, and earning interest (yield) in the process.

Funds locked up on Aave are currently divided between four markets: AAVE V1, AAVE V2, AMM and AAVE Polygon. Cumulatively, the total pool currently tops £11.5 billion. What’s more, as it is dependent on the prices of cryptocurrencies, this pool exceeded £15.88 billion at the beginning of June.

Soon, Aave should be available to institutional investors via a pro version, simply named Aave Pro. It will be launched in partnership with Fireblock.

Initially, Aave Pro will only support four cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), USD Coin (USDC) and Aave (AAVE). The pools will be separate from the markets already in place.

In order to make this version accessible only to institutional investors, companies, institutions and FinTech, it will put in place robust Know Your Customer (KYC) verification from Fireblocks. The partnership with Fireblocks also aims to implement anti-money laundering and anti-fraud checks.

Mixed reactions

For many observers, this new project is good news and should help institutional investors get involved in the DeFi space.

However, some are concerned about the partnership with Fireblocks. The company is currently being sued by StakeHound after it removed private keys from a £52 million ETH portfolio.

Other users are mostly sceptical about the arrival of institutional investors and what they can bring to the world of cryptocurrencies.

With Aave Pro version, this reputable platform presents itself as a wise choice for institutional investors. It has decided to partner with Fireblocks to regulate the future operation of its Pro offering. Despite its rapid growth, Aave faces competition that also intends to attract institutional investors. The battle between Aave and Compound is particularly fierce, and the price of their tokens have jumped over 20% recently.

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Matthieu Palois avatar
Matthieu Palois

Mon intérêt pour les nouvelles technologies m’a téléporté dans l’univers blockchain. Dimension à la fois complexe et tellement vaste que mon cerveau a d’abord réagi en mode "Error 404" frôlant la faille spatio-temporelle avant que j’en comprenne peu à peu les codes. Le chemin est encore long avant d’obtenir le salut du dieu Crypto, mais en attendant j’en profite pour partager ma passion avec vous.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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