Aave Arc, a permissioned version of the popular DeFi lending platform Aave, has launched today. Fireblocks, an institutional crypto custody firm, has become the first whitelister of Aave Arc.
Aave first revealed the permissioned platform in July last year. The platform is aimed at institutions who want to participate in the DeFi sector in a compliant manner.
Aave Arc enables certain parties who have undergone financial due diligence to be able to borrow and lend cryptocurrencies automatically to other such parties. It operates in the same way as Aave's main protocol works, but only approved parties can participate.
Fireblocks, being Aave Arc's first whitelister, will run due diligence on institutions that are looking to lend or borrow crypto assets through the platform. Aave Arc will initially support four assets: ether (ETH), wrapped bitcoin (WBTC), the USDC stablecoin, and Aave's native token AAVE.
The launch of Aave Arc will enable the world's largest institutions to begin participating in DeFi, according to Fireblocks co-founder and CEO Michael Shaulov.
Shaulov told The Block that Fireblocks will employ globally accepted KYC and due diligence procedures per FATF guidelines to onboard institutions to DeFi.
At launch, Fireblocks has whitelisted 30 institutions to participate on Aave Arc. These include SEBA Bank, Bluefire Capital (acquired by Galaxy Digital), Celsius, CoinShares, GSR, Ribbit Capital, QCP Capital, and Wintermute.
“The launch of Aave Arc is a pivotal moment in DeFi," according to Rich Rosenblum, co-founder and president of GSR. "As a result of Fireblocks making institutional access to DeFi pools possible, companies like ours are able to create new products for our customers."
While Fireblocks is the first whitelister of Aave Arc, more entities are expected to join as a whitelister of the platform. Last month, Securitize made a proposal to Aave's governance forum for it to be the next whitelister.
"Additional whitelisters for Aave Arc will help facilitate market participants’ choice of onboarding onto Aave Arc via one or more whitelister," Aave founder and CEO Stani Kulechov told The Block.
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.