Top DeFi money market protocol Aave is towing Compound Finance’s path of launching DeFi products for institutions. According to a report by Cointelegraph, the DeFi super-platform plans to release “Aave Pro” targeting larger investors.
Barely a month after a Twitter user who goes by the handle “TraderNoah” shared a screenshot of email participants of a webinar that featured Stani Kulechov, as a speaker. Others included Fireblocks CEO and co-founder Michael Shaulov, and Galaxy Digital CEO Mike Novogratz. Per the screenshot, the email which recapped the highlights of the event stated Aave is launching Aave Pro in response to “extensive demand from various institutions.” The platform will only support four crypto assets at its beginning: BTC, ETH, AAVE, and USDC. Aave Pro’s pools will also be kept separate from its main platform.
To roll out Aave Pro, Aave has tapped Fireblocks to help with onboarding investors by handling the Know-Your-Customer verification process. Fireblocks will also be tasked with implementing anti-money laundering and anti-fraud controls for Aave Pro. Although this comes as a healthy development for Aave and the DeFi industry at large, the Twitter post suggesting this move came with mixed reactions. Some expressed optimism over this sharing that it will further deepen the rail to bridge the institutional sector with the burgeoning DeFi sector. On the other hand, a few others were skeptical on Aave’s choice of Fireblocks, citing the recent case ongoing in court against the firm by staking provider, StakeHound. The latter had filed a lawsuit against Fireblocks over the deletion of private keys to a wallet containing $72 million worth of Ether which Fireblocks have denied responsibility for. However, Fireblocks is no novice in the game as it has offered similar services to Aave’s industry peers in the past. In 2020, Compound teamed up with Fireblocks to launch a product geared at bridging the gap between institutions and the DeFi sector which is now taking shape.
Moreso, in May, Stani Kulechov said that Aave had created a “private pool” for institutions to “practice” with before jumping headfirst into DeFi.
Compound Treasury may be the igniter for massive institutional inflows into DeFi
It was just last week that Compound Finance released details of its institutional-focused product which we reported. Dubbing it Compound Treasury, this will earn institutional investors a stable 4 percent APY on their savings. A welcome development which many are touting to be the next hottest trend for the DeFi sector. Compound Finance popularised the liquidity mining approach for bootstrapping liquidity for DeFi projects back in 2020 when it launched its native governance token- COMP.
Aave is currently among the top DeFi projects with over $17 billion in Total Value Locked (TVL). The money market protocol is among the few projects that launched through the ICO model in 2017 and survived the 2 year long brutal crypto winter of 2018 and 2019. Furthermore, the email also stated future plans where Aave may decentralise governance for Aave Pro, ceding the power to them to determine what the future of the platform will look like.