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UK-based decentralised lending platform Aave has launched its permissioned lending and liquidity service Aave Arc to help institutions participate in regulation-compliant DeFi.
The lending platform added a permissioned liquidity pool to its other decentralised offerings as a way to entice institutional participants to have regulatory compliance in DeFi.
The first of 30 entities lined up for the whitelist for Aave Arc was Fireblocks, the institutional digital asset custodian. As the company explains it, the the pool enables whitelisted institutions to participate in DeFi as liquidity suppliers and borrowers.
Users of Aave Arc must perform due diligence procedures such as know your customer/ anti-money laundering (KYC/AML) in order to gain access. Fireblocks also serves as a whitelisting agent for Aave Arc, ensuring other institutions that wish to join the permission pool perform KYC/AML requirements. Aave cannot perform this task itself because it is not a regulated entity such as a bank or other traditional finance institution.
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