Fireblocks Integrates DeFi Lending Platform Compound For Its Institutional Investors
The security platform for institutional digital assets Fireblocks has made the announcement that it’s integrating the decentralized finance (DeFi) platform for lending Compound, which is the second Ethereum (ETH) application in the world.
Those who store assets on Fireblocks will now be able to make a passive income if they access Compound. The Compound algorithmic protocol for interest rates is at the moment managing about $163 million in digital assets with rate interests, stablecoins and cryptocurrencies included. The new partnership will have hedge funds, exchanges and market makers putting their assets on Compound.
Institutions Will Have the Most to Gain
Rober Leshner, Compound’s CEO, said that collaborating with Fireblocks will help institutional clients use the network without any effort. He mentioned that while retail investors won’t have a problem using the system, institutions that have issues with their security and usually deploy funds that aren’t theirs will.
However, Fireblocks made available to all institutional players a multi-party key system for putting funds on its network. Here’s what Compound’s CEO, Michael Shaulov, had to say about the system:
“You can now put governance in place. For example, if someone wants to deploy a million dollars or half a million dollars into Compound, multiple users within the fund would need to approve that transaction.”
He added that Compound customers will hold the assets that otherwise would be dormant. Furthermore, ETH blockchain smart contacts would add a new layer as far as security goes. Here’s what he had to say after:
“The most interesting part is that […] you need to put assets into the smart contract [and] you actually don't have the counterparty risk that you're exposed to if you're using other services that are not decentralized — so arguably you have less risk using Compound than putting your money in JP Morgan or Bank Lehman Brothers.”
How DeFi Holds in a Bear Market?
Since the assets’ prices, of cryptocurrencies included, are going down as a result of the coronavirus crisis, many doubt how resilient some DeFi networks are. For example, the biggest DeFi ETH player on the market, MakerDAO, is allegedly mulling and may head towards a shutdown. At the same time, others prefer to be optimistic, with Leshner saying that:
“[Compound] held up flawless, but it’s been crazy to watch how DeFi sustains itself amidst fifty percent price declines.”