On Wednesday, Aave announced the introduction of Aave Arc, a permissioned platform for financial institutions looking to participate in DeFi in a compliant manner. Aave is a well-known DeFi lending platform, and the DeFi protocol currently has the third-largest total-value-locked (TVL). Aave has a $14.52 billion TVL split among three blockchains, including Ethereum, Avalanche, and Polygon, according to metrics.

Fireblocks, a cryptocurrency custody company, has accepted 30 financial institutions to join Aave Arc. Ribbit Capital, Coinshares, Hidden Road, Wintermute, and Celsius are among the companies on the list. Aave unveiled the Aave Arc concept in July 2021, and Fireblocks was confirmed as the first whitelister in mid-November. After clarifying that DeFi was inaccessible to traditional financial institutions, the DeFi startup also detailed how Aave Arc would work.

 “Aave Arc is a permissioned market based on the Aave V2 market,” Aave said at the time. “In the spirit of innovation and experimentation, Aave Arc creates a Web3-native experience for financial institutions to harness the power of DeFi in a permissioned sandbox environment.” 

The DeFi startup added:

“True to the values of DeFi, Aave Arc is designed to be fully decentralized and governed by Aave Governance. ‘Whitelisters’ that KYC and onboard institutions and corporations onto Aave Arc can be appointed or removed by Aave protocol governance.”

Essentially, the new platform enables traditional finance firms to engage in the Aave system while also utilizing a permissioned liquidity pool. Fireblocks, a crypto custody provider, expects that more institutions will embrace cryptocurrencies in 2022, and this is the company's top forecast. Institutional interest in crypto will accelerate in 2022, Fireblocks says in a blog post.

This adoption will gain more momentum from developments in post-trade infrastructure that are currently being implemented across the marketplace, Fireblocks 2022 prediction post adds.

Aave's native crypto asset, aave (AAVE), has a market capitalization of roughly $3.47 billion and a global trade volume of $294 million as of January 5, 2022. AAVE is up over a percent on a weekly basis, 38.1 percent on a two-week basis, and 135 percent on a year-to-date basis, according to statistics.

DeFi Lending Startup Aave Launches Permissioned Platform to Induce Financial Institutions

Aave has a $14.52 billion TVL split among three blockchains, including Ethereum, Avalanche, and Polygon, according to metrics.

Prabhjeet Bhatla is a cryptocurrency writer covering startups and a researcher since 2020. She has authored many articles for Entrepreneur India and APAC (digital and print) on cryptocurrency and ever-evolving Blockchain, the technology behind Bitcoin, and other cryptocurrencies. She specializes in applied cryptography, privacy-enhanced information storage systems, anonymous cryptocurrencies, elliptic curve crypto-systems, and satellite television piracy.

DeFi Lending Startup Aave Launches Permissioned Platform to Induce Financial Institutions

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