Aave is a decentralized lending platform that has piqued the interest of institutional participants, thanks to a new initiative. This platform also has two types of tokens namely, aTokens and its native token AAVE.
People who are new to the crypto space may not know a lot about Aave. However, this platform has included a permissioned liquidity pool to its decentralized offerings, which has intrigued major institutional entities.
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Details About Aave’s Permissioned Liquidity Pool
The decentralized lending platform has launched a permissioned lending and liquidity service called Aave Arc. This service will help the institutions in participating in regulation-compliant DeFi. This option has grabbed the attention of institutional participants as 30 institutions have reportedly listed themselves for the whitelist for Aave Arc.
The first major entity to list itself was the institutional crypto asset custodian, Fireblocks.
The Aave platform also has permissionless cross-chain counterparts. However, the Aave Arc is permissioned and has been specifically designed for the institutions. This service can help the institutions in maintaining regulatory compliance in the DeFi space, as was also stated in a recent announcement.
“It enables whitelisted institutions to securely participate in DeFi as liquidity suppliers and borrowers.”
Entities that want access to Aave Arc will be required to go through procedures such as know your customer (KYC) and anti-money laundering (AML). Fireblocks will assist Aave Arc in making sure that all institutional participants that want to join Aave Arc complete the necessary procedures and requirements mentioned above.
Fireblocks will be acting as a whitelisting agent as Aave Arc is not a regulated entity and is, therefore, unable to complete the whitelisting all by itself.
According to reports, Fireblocks has approved 30 licensed financial institutions who will be participating in Aave Arc as “suppliers, borrowers, and liquidators.”
Some of the entities that have been included in the whitelist include the following:
- Anubi Capital
- Canvas Digital
- Celsius (crypto yield aggregator)
Thanks to the regulatory certainties that are somewhat being seen in the crypto space now, Aave plans to bring several other institutions on board as well. However, the success and growth of the Aave Arc can only be seen with time.
What Should Crypto Investors and Traders Know?
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