Sarah Tran
Independent Analyst
- Popular DeFi lending platform Aave is launching a new protocol for institutional investors.
- Citing an increase in demand from professional investors in the industry, Aave Pro will be launched in July.
- The lending platform stated that there are plans to decentralize the governance of Aave Pro on the roadmap.
Aave will be launching private pools that will enable institutions to have access to decentralized markets in July.
Institutional demand for DeFi on the rise
Aave is a decentralized lending platform that allows users to borrow, lend and earn interest on cryptocurrencies without the requirement of a third party. The protocol runs on the Ethereum blockchain, which allows for smart contracts to be used for a distributed network to manage the assets on the network.
Borrowers would need to post collateral before they can borrow funds in another crypto asset. The process allows users to gain exposure to other digital currencies without having to own them.
One of the largest decentralized finance (DeFi) lending protocols, Aave is expected to launch a permissioned liquidity protocol for institutional clients later this month, given the recent rise in demand.
The launch of the private pools will allow professional investors to access DeFi through the new protocol called Aave Pro.
Currently, Aave is the largest decentralized lending protocol on the Ethereum network with over $10 billion in total value locked, according to DeFi Pulse.
Aave Pro will allow large corporations and financial clients to access DeFi while being able to comply with regulations. The new protocol will require the completion of a Know Your Customer (KYC) process, as it aims to follow strict regulations catering to institutions.
For the essential KYC process required for Aave Pro, the DeFi firm has partnered with digital asset custody firm Fireblocks to onboard new clients.
Following the “Next Steps in Institutional DeFi” webinar that featured Aave CEO Stani Kulechov and Fireblocks CEO Michael Shaulov, emails have been sent to attendees regarding the new product.
According to the email, Aave Pro will support four assets: Bitcoin, Ether, Aave and USD Coin. The message revealed that the new institutional product was initiated given the increase in demand from “various institutions.”
The protocol aimed at corporations will provide the same kinds of services as Aave’s current platform but will be kept separately from the main pools.
Additionally, the permissioned liquidity protocol will add a whitelisting layer onto the network’s existing V2 smart contracts to make sure that only “institutions, corporates and fintechs” that have been given the green light by Fireblocks’ KYC verification process would have access to the platform.
Aave further stated that there are plans in the future for further decentralization of the governance of Aave Pro.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
Is Altcoin Season here as Bitcoin reaches a new all-time high?
Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.
Shanghai court confirms legal recognition of crypto ownership
A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.