Aave Pro – DeFi Grade Yields For The Institutions And The Corporate World


Stani Kulechov – Aave founder hinted at a “private pool for institutions that are still practicing before aping into DeFi” on May 12 and later announced Aave Pro on May 18. What does it do? It allows institutions and the corporate world to access DeFi grade yields on the leading lending/borrowing Ethereum based Aave protocol – however it would be a specially curated version and will allow access, only once “certain requirements” have been met.

Aave Pro, like other institutional flavored DeFi versions of existing products on the rise, allows privileged permissioned access to clients, who wouldn’t be able to access the DeFi world otherwise, because of regulatory and compliance issues.

A recap email revealed over Twitter by @TraderNoah offers more perspective on this interesting new product likely to launch in this month. Aave Pro was discussed further in the recent Blockworks seminar “Next Steps In Institutional DeFi” and the attendees received email, as a reminder of what was discussed. According to the email, Aave Pro will have the following characteristics.

It will feature Aave v2 smart contracts, secure being tested and audited extensively. The most prominent part is that access would require whitelisting through Know Your Customer (KYC) completion. On it’s launch, it will feature liquidity pools of only Bitcoin, Ethereum, USDC and Aave itself.

This whole version of flavored DeFi will exist outside the Aave’s public version. Aave Pro will be assisted by Fireblocks for money laundering and fraud protection. It will still be governed by the Aave governance, contribute to the treasury and will benefit the ecosystem.

There’s community disagreement over designing permissioned KYC versions of DeFi protocols – since they go against the decentralized finance (DeFi) central ethos, but it’s likely to turn into a bridge between TradeFi and DeFi, moving value across and normalizing usage of the new revolutionary finance system by the traditional one.

What’s Aave And Aave Pro

Aave is a decentralized lending and borrowing protocol. It is open source and non-custodial. The lenders supply assets to earn compounding interest and get a-marked tokens, which continuously increase in value to account for the added interest. On the other side, the borrowers can obtain loans by supplying assets, with the collaterization ratio, liquidation threshold and liquidation penalty parameters.

The interest rates automatically change based on supply / demand and the withdrawals can be made at any time. Aave Pro, operates in the same manner, however allows privileged access to specially curated pools for institutional clients and the corporate world. It allows for TradeFi inclusion in the DeFi world and is a likely conduit for an interconnected world, where money flows freely between both versions of finance.

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