Aave Pro for Institutional Investors Is Coming This Month ‘Due to Extensive Demand’


Popular DeFi lending platform Aave is now all set to launch its platform for institutional investors.

First announced in May, Stani Kulechov, founder and CEO of Aave, shared at the time that they have started testing its private pools. Now, Kulechov has confirmed that Aave Pro is finally coming in July.

This was actually shared during Blockworks’ “Next Steps in Institutional DeFi” webinar, where the protocol noted that “due to extensive demand from various institutions,” Aave has partnered with Fireblocks to launch the first permissioned decentralized liquidity protocol Aave Pro in July.

Aave Pro will enable institutions and corporates to access DeFi yields and benefit from its transparency and automation, it reads.

According to the memo shared, Aave Pro is using the battle-tested and extensively audited V2 smart contracts and adding a layer of whitelisting so that only those participants that have completed their KYC can access the Aave Pro pool.

Initially, only four assets, Bitcoin (BTC), Ethereum (ETH), USDC, and Aave (AAVE), will be included in the Aave Pro liquidity pool because institutional demand is concentrated in these assets.

This liquidity pool will be segregated from other Aave liquidity pools on the Aave V2 market and the Aave Polygon market, it further states.

Digital asset custody, transfer, and settlement platform Fireblocks will be the one onboarding the entities, including institutions, corporates, and fintech. It will also implement AML compliance and anti-fraud controls on this Aave Pro market.

“Aave Pro will be decentralised and governed by the Aave governance,” which Kulechov says is the “most interesting” part.

It's not just Aave; competitor Compound Finance also recently launched its new product Compound Treasury targeting institutional investors. Through Compound Treasury, it is offering attractive fixed 4% APR on US dollars with daily liquidity but with none of the complexity of crypto.

“Our vision is that Compound Treasury becomes the bridge for non-crypto financial institutions to deliver the core benefits of DeFi to the next billion users,” said the team last week at the announcement.

It has already started onboarding customers and is planning to expand access to it “significantly over the coming months.”

“Everyone is late to yield farming but its still better than negative interest rates but now all that money is cheap fuel for sharper people who can utilise it better,” said trader Loomdart of eGirl Capital, talking about traditional investors that take too long to deploy capital.

According to him, this will bring in “tens of billions of dollars of legacy fund money” that is not priced in by the DeFi market, which is bouncing since last week.

In the current environment of zero to sub-zero interest rates, institutional investors are seeking yield, and through these DeFi products, they are getting much higher returns without even gaining direct crypto exposure and the volatile price action.

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