DeFi protocol Aave is partnering with Swiss banking firm CrescoFin to launch a decentralized money market. The deal is going to bring a banking institution to turn towards DeFi for managing their finances. The collaboration will also entail that insured savings are now accessible within the DeFi. The intention behind the collaboration is to act as a bridge between traditional finance and crypto.
Aave Launches Money Market With CrescoFin
The partnership with Aave will now offer investors the option for a safer savings account. The collaboration hopes to attract investors within DeFi the idea of an insured collateral money market.
Moreover, the new money market platform will allow traders to deposit funds into the protocol in exchange for insurance for adding the protocol. Meanwhile, when investors try withdrawing their funds the tokens will get burned.
The rates will be determined based on whoever lends the funds for a longer time will be awarded at a higher rate. This in turn will effectively create a yield curve. It could also enable the users of DeFi to interact with multiple smart contracts with composability.
Institutional Money Entering Into DeFi to be Enormous
CrescoFin believes that institutional money entering into DeFi is going to enormous and Aave is going to be the few of that is likely to catch those meaningful funds.
Aave is one of the most popular DeFi protocols in the space with total value locked for around $1.3 billion till today. This represents an increase of a factor of 4,000 since the beginning of 2020.
The launch of a money market in a decentralized ecosystem can definitely bring traditional money managers to use Aave in search of a better yield. As traditional investors seem more interested in a regulated route, hence the collaboration between Aave and CrescoFin partnership can definitely prove to be a fruitful one.