DeFi lending protocol, Aave protocol, has built a permissioned pool for institutions to test out before getting involved within the DeFi ecosystem. The permissioned test pool is designed to be compliant with AML regulations with mandatory Know Your Customer (KYC) verification process from relevant partners. The pool would be coming to mainnet sooner rather than later.
Aave Permissioned Pool for Institutional Investors
Earlier on May 12, a Twitter user posted a tweet tagging Aave’s official Twitter account expressing concern that an anti-money laundering warning had appeared on Aave’s homepage.
Responding to this, the founder of AAVE, Stani Kulechov tweeted back saying that there had been a mistake and that “The text is actually incorrect and relates to another pool we’re testing out” explaining that Aave is still fully decentralized, and the text had appeared in the wrong place before later revealing that Aave is testing out a private pool for institutional investors.
Another user replied asking whether the specified pool was for testing out compliance features. Kulechov then confirmed the private pool was built for institutions to practice “before aping into DeFi.”
Even though Aave was launched at the beginning of 2020, it has experienced significant growth in total deposits and daily deposits since the summer of 2020.
Aave’s recent launch on Polygon and the introduction of its liquidity program was followed by its total value locked rising from $5.4 billion on April 25 to roughly $11.4 billion on May 12.
Aave Deposits and Permissioned Pool for Institutional Investors
Aave’s head of institutional business development, Ajit Tripathi, confirmed that the protocol had indeed designed a permissioned pool.
However, the “private pool” description in Kulechov’s Tweet was not entirely accurate as the pool will be on public chains but will have permissioned access for institutions, describing that the purpose of the pool was educational.
Aave has totaled over $45 billion in deposits, with 2021 seeing the protocol average $231 million in deposits per day. Over 46,000 unique Ethereum users have become lenders on Aave, with the average all-time deposit reaching $173,000. AAVE is currently trading at $566 at the time of writing.