DeFi Mainstay Aave Launches Money Market With CrescoFin

Key Takeaways

  • Aave is partnering with CrescoFin to launch a decentralized money market.
  • CrescoFin aims to bring the benefits of insured savings onto the blockchain.
  • The development is a possible first step towards institutions turning to DeFi to manage their money.

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Aave, one of the most established DeFi protocols, is launching a money market.

The development is thanks to a partnership with CrescoFin, a Swiss banking company advocating for the advent of decentralized finance. 

CrescoFin announced the collaboration in a Medium blog post on Tuesday, citing the benefits of offering insured savings in DeFi, as well as Aave’s strong security credentials. The Swiss firm highlighted its plans for “institutional adoption,” pointing to Aave’s focus on security as a “needed prerequisite” to attract potential investors. 

The subject of “institutional money” has been an ongoing point of discussion in the blockchain space. While several large-scale investors have warmed to Bitcoin in recent months, certain signs suggest that institutional adoption has been slower within DeFi. 

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CrescoFin says it hopes that the integration with Aave will offer investors a “safe savings account option,” in turn ushering in a wave of adoption. The firm has also confirmed that proof of reserves and price information will be sourced using the price oracle Chainlink

The money market will enable investors to deposit funds into the protocol, with insured tokens provided in exchange for adding collateral. The tokens will then get burned when the investor withdraws their funds.

Higher rates will be paid to those who lend funds on a longer timeframe, effectively creating what’s known as a “yield curve.” It could also enable DeFi users to use “money legos”—a phrase often used to describe the process of interacting with multiple smart contracts with composability. 

CrescoFin and Aave
Source: CrescoFin

It’s a promising sign of progress for DeFi as a whole….

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