Cryptocurrency custodian Copper is looking to connect institutions to the emerging world of decentralized finance (DeFi) with a newly unveiled new product.
CopperConnect to pave the way for institutions
Announced Friday, CopperConnect is a bridge between Copper's existing storage services and DeFi apps. In a press release regarding the new tool, Copper says DeFi risks have decreased, making the speculative field more attractive to institutional clients.
“In the past, the DeFi space was considered too volatile for many crypto funds. However, in recent months, the number of non-certified DeFi projects (i.e. projects where their smart contracts have not been vetted by third party experts) has decreased and the fluctuations in the value of DeFi markets have become less dramatic, "he said. Copper.
However, Aave's decentralized money market CEO Stani Kulechov said that there has been "a significant increase in the number of institutions trying to deposit cash on our project."
No particular institutional client who may have expressed curiosity about DeFi to Copper is named or quoted in the press release. Copper's new financial facility offers a way to "comply with [the institutions] strict rules for risk management," Kulechov continued.
Minimize operational risks
CopperConnect is an infrastructure system that provides security throughout the custody, transfer and locking process, as assets are governed with a DeFi smart contract.
The application on Google Chrome, or the browser extension, is reportedly working to connect Copper's multi-party computation (MPC) custody system to both centralized exchanges and DeFi apps.
When exiting a DeFi pool, assets can only be returned to the wallet they came from, according to Copper. It is unclear if the service works with all DeFi applications. Aave's Kulechov said the system eliminates nearly all operational risks.
Katrina Daminova, Copper's product chief, suggested it also adds efficiency to operations. In September, crypto firm Trustology bundled a "DeFi Firewall" with its suite of investment instruments institutional, also to bridge the gap between traditional and decentralized finance.
While Curv, another cryptocurrency custodian provider, now provides institutions with access to the leading DeFi Compound protocol. In February, Copper raised $ 8 million in capital by supporting plans to expand into new markets.
"Since 2017, we have seen many cryptocurrency custody solutions emerge that do not fully meet the needs of institutions," said Copper CEO Dmitry Tokarev. "On the contrary, an institutional framework does not yet exist, and it is unlikely that it ever will, leaving institutions discouraged."
