Banks are out of the bag: in a tweet on Wednesday, Stani Kulechov, Co-founder of the decentralized financial money market protocol, Aave, found that the protocol created a “private pool” in which institutions can “practice” before engaging with the DeFi ecosystem.
At certain times on Wednesday morning, a Twitter user posted an annoying tweet to Aave’s official Twitter account. Noting that his address has been “blacklisted” due to anti-money laundering (AML) requirements:
Me. WHAT THE HELL @AaveAave $ AAVE? pic.twitter.com/xKnaG7Idya
to???? HMS RÎ ?? Î ?? pÎ ?? r (@ Fernjosh1) May 12, 2021
Hello what the hell aave?
Kulechov himself replied to the tweet, first saying that there was an error and that “The text is actually wrong and refers to another pool that we are testing”, before later revealing the clientele for whom the pool was designed:
It is a private pool for institutions that are still practicing before engaging in DeFi
to???? stani.eth = (â¬¤_â¬¤) = (@StaniKulechov) May 12, 2021
It is a private pool for institutions that are still practicing before engaging in DeFi.
In an interview with Cointelegraph, Aave’s director of institutional business development, Ajit Tripathi confirmed that the protocol designed a pool with permission. The description of the “private pool” in Kulechov’s tweet was a misnomer as the pool will be in public chains but will have access with permission, specifically for institutions. The end of the pool is educational.
“It’s a great solution to encourage collaborative learning between CeFi and DeFi,” Said Tripathi.
He noted that the test pool was designed to comply with AML regulations and that all users would have to undergo it “Know your customer” check from relevant partners. Also, the pool could reach the main network sooner rather than later:
“We are at an advanced stage of development. Please stay in this area for more information.”
While many AAVE token holders welcomed the news that institutional money could soon be pouring into the protocol, Other users were more skeptical about what centralized institutions’ involvement in DeFi could mean.
The pursuit of institutions will kill this movement, mark my words. https://t.co/7AQTFcQD0P
to???? Ser Doggo IV, surname (@fubuloubu) May 12, 2021
Delighting the institutions will end this movement, remember my words.
However, Tripathi pointed out that As with the DeFi ecosystem itself, how institutions can participate in the protocols remains an open question.
“This is a space for innovation and learning for both CeFi and DeFi. As I said earlier, institutions, the DeFi community and regulators are excited about the promise DeFi is making to create a more equitable financial infrastructure that will work for everyone and us efficient and inclusive are grateful to be able to contribute. “