Fireblocks Draws Closer to Getting Wall Street Cash on DeFi Giant Aave

Fireblocks, the digital asset security firm, has posted a proposal on Aave’s forum to scrutinize and approve participants on the DeFi giant’s platform.

If Aave governance passes the whitelisting proposal, Fireblocks would be able to onboard a slew of institutional clients into the lending protocol. 

Fireblock’s CEO, Michael Shaulov told The Defiant that roughly 50 of the company’s 500 institutional clients, which include banks, hedge funds, and brokerage firms, have expressed interest in using a permissioned version of Aave. With $13.4B in total value locked, Aave is the No. 1 platform on DeFi Pulse’s leaderboard.

The integration would be with Aave Arc, a forthcoming version of the protocol geared towards institutional clients. Aave Arc requires participants to be whitelisted, an approval process that entails complying with know-your-customer checks and other regulatory requirements. 

Permission Pool

“There is so much value to unlock,” Shaulov said. “Where else can you earn 4% on average yield on US dollars with counterparty risk that is very understood?” Yields on major stablecoins like DAI, USDT, USDC, are currently higher than 5%.

Under the proposal, Fireblocks would serve as the whitelister for institutions to access these pools of “permissioned” capital. All members will have to hit a certain level of screening to act as borrowers, lenders and liquidators in a permission pool. 

Fireblocks has worked with institutions for the last six months to understand what’s needed to to participate with DeFi protocols like Aave. The outfit has onboarded clients into DeFi since March 2020 when the company integrated with another lender, Compound Finance.