The Switzerland-based digital asset-focused bank SEBA wants to be a Whitelister to the Aave Arc, the institutional platform developed by decentralized lending protocol Aave.
SEBA has submitted a proposal to Aave Governance for the same, noting the whitelisting will enable its eager clients to access the Aave platform more broadly.
The licensed and supervised Swiss Bank provides a seamless and secure bridge between digital and traditional assets. It serves professional and institutional clients, including private banks, asset managers, and crypto companies.
The bank noted in the proposal that its clients’ interest in crypto-earning products has “grown substantially” over time. It further said that initially, these clients were only lending crypto and staking with SEBA, and now they are “showing significant interest for accessing yields in DeFi protocols.”
But due to regulatory restrictions in their jurisdictions, SEBA’s institutional clientele hasn’t been able to deploy liquidities at a large scale in Aave. However, Aave Arc, with its permissioned layer, allows them to access DeFi yields while being compliant with their regulatory obligations.
Being a permissioned platform means that Aave Arc’s institutional participants have to go through a know-your-customer (KYC) process to participate in a dedicated lending pool.
SEBA expects their whitelisting to “directly benefit” the Aave community with its institutional liquidity as it will accelerate growth in TVL and protocol revenues.
The DeFi lending protocol currently has $14.67 billion of total value locked in it, down from a $19 billion high in late October, as per DeFi Llama. In the past year, the platform has also generated $34.7 million in protocol revenue. Aave’s monthly revenue hit its peak in October at $87.55 mln, up from $6.38 mln in January 2021.
Meanwhile, the $2.6 billion market cap governance token AAVE is trading at $196.50, up 16.5% in the past two days but still down over 70% from its ATH in May.
Since May, the decentralized finance (DeFi) sector tokens have struggled with price performance, especially against ETH.