London-based digital asset custodian Copper has announced the launch of CopperConnect, a dedicated decentralised finance (DeFi) tool for crypto institutions.
CopperConnect provides institutional investors, like crypto funds, with a highly secure way to connect digital assets stored in Copper’s multi-party computation (MPC) wallets with decentralised applications (dApps).
This allows investors to lock their assets into DeFi ‘smart contracts’ and tap into the liquidity currently locked in DeFi, valued at nearly than $13 billion.
Currently, when a user deposits cryptocurrencies onto a DeFi pool, they effectively lend out their capital in order to earn passive income.
DeFi is an industry still in its infancy, which has caused several barriers of entry to institutional investors.
Copper’s new offering ensures that security of assets is upheld throughout the DeFi lifecycle, ensuring that assets are secure when under custody and during transfers.
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— Copper.co (@CopperHQ) November 26, 2020
Copper’s Head of Product, Katrina Daminova, said:“Over the past three months, there has been a lot of excitement about the potential of DeFi for crypto institutions.
“The prospect of being able to earn interest on assets that would otherwise just be sitting in a secure wallet is a potential game-changer for any crypto-fund.
“However, up until very recently, the lack of security auditing coupled with radical value drops on major DeFi projects have driven up the risk and deterred institutions from investing.
“But the tide has rapidly turned – only last month, DeFi audit firms reported an overwhelming demand from DeFi companies to get their projects audited.
“This push for credibility has come with a notable stabilisation across the sector, and finally institutions are looking at DeFi as a legitimate channel to earn revenue, especially when many other financial markets are more volatile or weaker than normal.”
Stani Kulechov, CEO at Aave, the decentralised non-custodial money market protocol, added: “CopperConnect eliminates almost all operational risk considerations for institutions, and will allow for a significant increase in the liquidity deposited on our platform.
“We believe that this injection will help to usher in the next phase for DeFi, enabling a period of growth and increasing credibility across the sector.”
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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.