Big money coming into DeFi as 30 institutions set to join permissioned DeFi pool Aave Arc

  • Aave has finally launched its permissioned DeFi pool Aave Arc that targets institutional investors and regulated financial entities.
  • The pool will see 30 institutions join at launch, with Fireblocks being the whitelisting agent and new members including Celsius, CoinShares and GSR.

The age of regulated institutional decentralized finance (DeFi) is finally here, and Aave is leading this new and exciting frontier. Aave has finally announced the launch of Aave Arc, a permissioned DeFi lending and liquidity service. At launch, 30 institutions are set to come on board, including the pioneer Fireblocks and others such as Celsius and Anubi Digital.

In a January 5 announcement, Aave described Arc as “a DeFi liquidity market designed to be compliant with AML regulations, with all participating institutions required to undergo Know Your Customer (KYC) verification.”

Arc will enable institutional and regulated entities to finally securely participate in DeFi as liquidity providers and borrowers.

Fireblocks has actively participated in making Arc a reality. The New York-based digital assets custodian for institutional players is the first whitelister on the platform. It has also been tasked with developing a framework for whitelisting other interested institutions. It will conduct all the required know-your-customer (KYC) checks to ensure that the institutions adhere to global FATF guidelines.

At launch, Fireblocks has already approved 30 new institutions that will participate in the Aave Arc ecosystem from launch. These include U.K-based digital asset investment firm CoinShares, cryptocurrency trading firm and liquidity provider GSR, crypto lending platform Celsius, Galaxy Digital’s subsidiary Bluefire Capital, and crypto VC firm Hidden Road. Ribbit Capital, which is an early investor in Balance, Xapo and Credit Karma, is also among the 30 whitelisted firms.

As we reported, Swiss bank SEBA has also applied to join the ecosystem.

“Fireblocks’ approach has been approved by Aave protocol governance and all future whitelister institutions, if approved by Aave protocol governance, will have to meet or exceed these standards,” Aave stated.

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Making DeFi a $1T industry with Aave Arc

Aave Arc could be the beginning of an exciting new frontier in the cryptocurrency industry. So far, DeFi has blown up, but only through retail investors. According to DeFiLlama data, at press time, there’s $242 billion locked in DeFi. This is up tenfold from just a year ago when it was below $25 billion.

But still, the room for growth is immense. With the total market cap of the cryptocurrency industry topping $2 trillion, DeFi still has a lot of funds that it can attract, both from within and without.

Institutional players could be the piece of the DeFi puzzle that accelerates the growth of the sector and allows it to break the $1 trillion mark.

Stani Kulechov, the found and CEO of Aave commented:

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DeFi represents a powerful wave of financial innovation including transparency, liquidity, and programmability–and it’s been inaccessible to traditional financial institutions for far too long. The launch of Aave Arc allows these institutions to participate in DeFi in a compliant way for the very first time.

Participating in Aave Arc is super easy. Institutional players just need to apply for access, undergo KYC verification by Fireblocks and then proceed to access Arc through Fireblocks’ DeFi gateways.

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Steve has been a blockchain writer for four years, and a crypto enthusiast for even longer. He is most excited by the application of blockchain to solve the challenges facing developing nations.

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