Aave is a decentralized money market protocol where users can lend and borrow cryptocurrency across 20 different assets as collateral. The protocol has a native token called AAVE, which is also a governance token that lets the community decide the direction of the protocol in a collective manner. Lenders can earn interest by providing liquidity to the market, while borrowers can borrow by collateralizing their cryptoassets to take out loans from the liquidity pools.
Aave Arc will open DeFi’s door for the first time to institutions with a regulated regulation is when something is controlled by a specific set of rules. platform. More than 30 trading firms are authorized to operate.
Aave one of the largest protocols in the decentralized finance (DeFi) space, has officially launched its long-awaited institutional product.
The project launched its platform on Wednesday Aave Arc designed to bring DeFi to institutional investors. . The launch comes in partnership with cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. custodian a custodian is responsible for safely holding assets for an institution or individual for a variety of purposes. firm Fireblocks which has become the first of the White List (lista blanca) de Aave Arc . The start-up also includes more than 30 licensed commercial firms.
Aave a DeFi loan protocol with a total value locked (TVL) exceeding USD $14 billion had announced its institutional product in July 2021. Later, in December, it was reported that the Swiss bank SEBA Bank sought to be part of the white list of the project.
Aave Arc opens the DeFi door to the institutions
The aim of Aave Arc is to offer financial institutions and corporations digital asset lending services, providing them with a way to capture the returns offered by DeFi within a regulated environment. As such, the platform a place to buy, sell and store cryptocurrency operates in the same way as the main protocol the set of rules that define interactions on a network, usually involving consensus, transaction validation, and network participation on a blockchain. of the Aave The difference is that security the term securities refers to a fungible and tradable financial instrument that carries a type of monetary value. and compliance measures are applied.
Operators, in this case institutions, are identified through a Know Your Customer (KYC) process and comply with Anti-Money Laundering (AML) requirements in order to operate on the platform. The company Fireblocks is responsible for completing the necessary verifications to incorporate each institution following the above principles.
According to the co-founder and CEO of Fireblocks Michael Shaulov, the launch of Aave Arc will allow the world’s largest institutions to begin participating in DeFi. Some estimates point to to provide institutional access to DeFi could unlock a trillion dollar opportunity over the next half decade.
Regulated DeFi tools could unleash a wave of new products and services, such as flash loans and high-yield deposit accounts.
Initially, Aave Arc will be open to thirty institutions that are already on the white list, including: Anubi Capital capital is most commonly defined as the large sum of money you would use to invest. , Bluefire Capital (acquired by Galaxy Digital digital technologies are these electronic tools that have the ability to generate, store or even process data. ),Canvas Digital, Celsius, CoinShares, GSR, Hidden Road, Ribbit Capital, Covario y Wintermute .
Rich Rosenblum, co-founder and president of GSR He pointed out that the launch marks a “ momento crucial ” para DeFi. “ As a result of Fireblocks making institutional access to DeFi a movement encouraging alternatives to traditional, centralized forms of financial services. groups possible, companies like ours can create new products for our customers. “, Aggregate.
“DeFi will always be decentralized decentralization refers to the property of a system in which nodes or actors work in concert in a distributed fashion to achieve a common goal. and for all”.
DeFi, a space that has exploded in the last two years to become an industry of more than USD $250 billion The cryptocurrency exchange, offers a variety of services such as loans and credits with cryptocurrencies similar to traditional finance, but in a decentralized way. In general, users in this sector operate anonymously, with no KYC ‘Know Your Client’. A procedure when a trading platform or exchange would require you to confirm your identity in order for you to use them. identification requirements or AML anti-money-laundering laws, regulations, and procedures that aim to end the unlawful income practices. measures.
Hence, the idea of a regulated DeFi may sound strange – or even controversial – to some. In fact, Shaulov himself admitted that the concept runs counter to the decentralized nature of DeFi; although he considers it practically a necessary evil for the industry.
“ It is a necessary step, or over-correction, for the industry to reach a different state on an 18-24 month horizon. Next will be a kind of soft KYC, where you have a KYC token a digital unit designed with utility in mind, providing access and use of a larger crypto economic system. or KYC on chain. But to get there, we need to take a slightly more aggressive approach. “, he commented to CoinDesk .
For his part, the CEO of Aave Stani Kulechov contributed a comparison of DeFi and Web3 with open oceans. Infrastructure software is like those international waters that are not owned by anyone specifically and that anyone can cross, he said. Pero once you go to a port, you enter regulation, and financial institutions are the ports for that ocean. he added.
I think DeFi will be forever permissionless often used to describe blockchains, a system is said to be permissionless when there is no entity that can regulate who can use it and how it can be used. and accessible to everyone, as long a situation where you buy a cryptocurrency with the expectation of selling it at a higher price for profit later. as these networks (public blockchains like Ethereum, Polygon, Avalanche) are decentralized.
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- Decentralization the handover of control from a central authority to several different custodians. of DeFi is an “illusion”, says BIS as it reviews possible regulation
Article versioned by Hannah Estefania Perez / DiarioBitcoin
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