Latest news about Bitcoin and all cryptocurrencies. Your daily crypto news habit.
Designed for institutional investors, the lending pool will feature KYC and AML restrictions.
The banks are out of the bag: In a Tweet on Wednesday, Stani Kulechov, co-founder of decentralized finance money market protocol Aave, revealed that the Aave protocol has built a âprivate poolâ for institutions to âpracticeâ before getting involved with the DeFi ecosystem.Â
Earlier on Wednesday, a Twitter user posted an angry tweet directed at Aaveâs official Twitter account, noting that his address had been âblacklistedâ due to Anti-Money Laundering requirements:
Yo. WHAT THE FUCK @AaveAave $AAVE? pic.twitter.com/xKnaG7Idya
â HMS RÎÎpÎr (@Fernjosh1) May 12, 2021
Kulechov himself responded to the tweet, saying first that there had been a mistake and that âThe text is actually incorrect and relates to another pool we're testing out,â before later revealing the clientele the pool was designed for:Â
It's a private pool for institutions that are still practicing before aping into DeFi
â stani.eth =(⏀_⏀)= (@StaniKulechov) May 12, 2021
In an interview with Cointelegraph, Aaveâs head of institutional business development, Ajit Tripathi, confirmed that the protocol had designed a permissioned pool â the "private pool" description in Kulechov's Tweet was a misnomer in that the pool will be on public chains, but have permissioned access â specifically for institutions. He characterized the purpose of the pool as educational.Â
âIt's a great solution to promote collaborative learning across cefi and defi,â Tripathi said.
He noted that the permissioned test pool is designed to be compliant with AML regulations and that all users would have to undergo Know Your Customer verification from relevant partners. Moreover, the pool could be coming to mainnet sooner rather than later:
âWe are in advanced stages of development. Please watch this space for more information.â
While many AAVE tokenholders rejoiced at the news that institutional money may soon be flowing into the protocol, other users were more skeptical about what centralized institutions participating in DeFi might mean.Â
Pandering to institutions will kill this movement, mark my words. https://t.co/7AQTFcQD0P
â Ser Doggo IV, last of his name (@fubuloubu) May 12, 2021
However, Tripathi noted that, much like DeFi itself, figuring out how institutions can participate in protocols remains an open-ended question.Â
âThis is a space of innovation and learning for both cefi and defi. As I said, institutions, the defi community and the regulators are all excited about the promise defi holds in creating fairer, more efficient and more inclusive financial infrastructure for everyone and we are grateful to be able to contribute to that.â
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.