Firebox, a software platform for hosting, managing fund operations, accessing DeFi, minting and destroying tokens, and managing digital asset operations, announced Aave Arc, a new agency licensed DeFi liquidity pool, now together with Fireblocks as the first Whitelist of active protocols.
Aave Arc is a DeFi liquidity market designed to comply with AML regulations, and all participating institutions need to accept “Know Your Customer” (KYC) verification. This agreement provides institutional participants with a separate deployment of the Aave V2 liquidity pool, enabling whitelisted institutions to safely participate in DeFi as liquidity providers and borrowers.
Now, Fireblocks users who voluntarily join the whitelist through the KYC process can access Aave while benefiting from Fireblocks’ industry-leading security. Generally speaking, a license agreement like Aave Arc can provide the decentralized advantages of DeFi while only allowing licenses (whitelisting) to be more concentrated for KYC/AML purposes.
“DeFi represents a powerful wave of financial innovation, including transparency, liquidity and programmability-traditional financial institutions have been unable to obtain it for a long time. The launch of Aave Arc enables these institutions to participate in DeFi in a compliant manner for the first time.”
-Stany Kurechev. Founder and CEO of Aave
Supports DeFi licensed on Aave Arc as a whitelist
As the first active whitelist of Aave Arc, Fireblocks has developed a whitelist institutional framework based on FATF guidelines, which refers to the globally recognized KYC/CDD/EDD principles.
With this framework, Fireblocks can verify the identity and beneficial ownership of legal entity customers, and continuously monitor the Aave Arc mining pool and its participants.
At the time of its launch, Fireblocks has approved 30 licensed financial institutions to participate in Aave Arc as suppliers, borrowers and liquidators. Among them are Anubi Capital, Bluefire Capital (acquired by Galaxy Digital), Canvas Digital, Celsius, CoinShares, GSR, Hidden Road, Ribbit Capital and Wintermute.
The Fireblocks method has been approved by the Aave Protocol Governance, and all future whitelist institutions, if approved by the Aave Protocol Governance, will have to meet or exceed these standards.
How to use Fireblocks to access Aave Arc
With Fireblocks, joining Aave Arc is a simple process:
- Application access This page – Perform KYC through Fireblocks and become a whitelisted supplier, borrower and/or liquidator on Aave Arc. You must be a Fireblocks user to join as a supplier or borrower.
- Access Aave Arc through Fireblocks’ DeFi gateway – Aave Arc is another market on Aave that users can access through its web3 application immediately after being whitelisted.
1. What is a “white list”?
Whitelists are regulated custodians and financial institutions that are approved to conduct KYC and whitelist their customers to participate in the KYC DeFi agreement market.
2. Apart from Fireblocks users, are there any other institutions approved to participate in Aave Arc’s liquidity market?
Fireblocks is the first regulated entity and it is a whitelist approved by Aave Arc for KYC customers. Other regulated entities will be added in the future, and these entities will also be able to whitelist customers.
3. Does Aave also whitelist organizations?
Aave only recommends organizations to trusted and regulated entities (such as Fireblocks), and these entities are the only organizations that can KYC and whitelist recommending organizations.
4. Compared with the standard Aave, is there any difference in the function of Aave Arc?
The experience is roughly the same as the application UI. The main difference lies in the interaction with whitelisted suppliers and borrowers, and the smaller subset of tokens (WBTC, ETH, USDC, and AAVE).
5. What roles can approved agencies play on Aave Arc?
- supplier – Provide liquidity for the market to earn interest.
- Borrower – Provide collateral to borrow money from the liquid market.
- Liquidator – If the borrower does not meet their conditions, the liquidator enforces “good behavior” by purchasing part of the debt at a predetermined discount. They use APIs or smart contracts to find out who does not meet their loan terms.