This Week in DeFi – October 1
To the DeFi community,
This week, financial connectivity provider Fireblocks submitted a proposal to Aave’s governance to become the first “white list” for Aave Arc’s DeFi institutional offering. Similar to the Compound, Compound Treasury solution, Aave Arc will allow traditional financial institutions to access a siled pool of liquidity using the existing smart contract architecture, with the aim of providing regulatory compliance including major banks and others. institutions need before interacting with the industry. Partnerships with service providers such as Fireblocks will help ensure that all users have met the required KYC / AML and other due diligence standards before participating in Aave Arc.
ICYMI: Authorized DeFi Platform Aave Arc Prepares for Launch https://t.co/xH0m91KVHS
– The block (@TheBlock__) September 28, 2021
Daily active users on Polygon overtook those on Ethereum for the first time this week as demand for blockchain throughput continues to drive demand for scaling solutions of all types. Polygon has largely captured the “first player” advantage in the L2 race, but other competitors like Optimism or Avalanche are likely to see similar crossovers among active users in the weeks and months to come.
– Raphael (@RaphaelSignal) September 28, 2021
One of the first ‘blockchains for finance’, R3 announced this week that Corda’s corporate blockchain will develop a proof of concept for a hybrid DeFi solution, aimed at retaining enough privacy to prevent the rush ahead and attract customers. institutions while living the DeFi ethic. While even PoC’s release is expected in several months, the R3 solution will use proprietary nodes for transaction processing and privacy, with on-chain data becoming available after a certain delay to maintain transparency.
The @ interior_r3‘Obscura Network
delay transparency so that transactions are initially masked, preventing #Challenge forward. It can help DeFi enter the mainstream! # CordaCon2021 Can’t wait to read the white paper! @jwgcarlyle https://t.co/qx2fgfNH12
– The intersectionist ¯_ (ツ) _ / ¯ (@DeanDemellweek) September 29, 2021
And Société Générale (SocGen), a French bank at the forefront of blockchain and decentralized technology, submitted a proposal to MakerDAO’s governance to swap bond-backed tokens for a $ 20 million DAI loan, one of the first and certainly the largest interactions to date between real-world financial institutions and a DeFi protocol. The deal is still ongoing and will require a host of delegated agents to perform financial and legal tasks, particularly on the MakerDAO side, but looks likely to move forward and will represent a fundamental moment to bridge the gap between DeFi and traditional finance.
Jesus! Societe Generale has just made a (very long) proposal to MakerDAO 😳
[Security Tokens Refinancing] MIP6 application for OFH tokens
“is intended to refinance a covered bond token that was issued last year on the public Ethereum blockchain.” https://t.co/ugm5eb3OXH pic.twitter.com/lVs34rwhoL
– Julien Bouteloup (@bneiluj) September 30, 2021
A big week for institutional adoption of DeFi, not to mention the news that Visa is committed to building a universal cross-chain payment solution. Such pleas are an exciting sign of adoption, but also raise interesting questions – as Ethereum gains momentum as a de facto chain for institutional adoption, will it also retain its place as the darling of decentralized, unauthorized defenders of censorship resistance?
What is perhaps even more interesting is that institutions are taking the plunge and interacting with DeFi protocols at the application level, using proposals and working through the decentralized governance system like any other member of the the governance community; the most courageous and advanced institutions meet the DeFi community on their own ground. And while solutions such as permitted liquidity pools and other tactics to provide regulatory certainty will be marked by some as unacceptable ideological concessions, the liquidity these programs bring to the global ecosystem will be a huge boon to the world. long-term DeFi industry.
DeFi is on the way out of the digital realm and part of the real world economy. If you are reading this, you are an early adopter, helping to build the future of finance. Let’s do our best to welcome these new institutional frens (and their liquidity) and take this ecosystem to the next level.
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Alex is a Content Writer at Circle, with prior experience in tech startups, Fortune 500 companies, and as a freelance writer and analyst. His interests include cutting edge technologies in blockchain, energy, supply chains, transportation, city life, and more, and he has been part of the crypto community since 2014.