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Fireblocks to ‘Bridge the Gap’ Between Institutional Traders and DeFi

Institutional digital asset security platform Fireblocks has announced an integration with decentralized finance (DeFi) lending platform Compound — currently the second-largest application built on Ethereum.

Entities storing assets with Fireblocks can now generate passive income by accessing Compound — an algorithmic interest rate protocol currently managing $163 million in interest-earning digital assets including cryptocurrencies and stablecoins.

The partnership will allow institutions like market makers, hedge funds and exchanges to put assets on Compound. 

Fireblocks to make things easier for institutions 

Speaking to Cointelegraph, Compound CEO Robert Leshner explained that the partnership with Fireblocks will make it easier for institutional entities to use the network. 

Leshner said, “So right now, to access this financial market, you have to be pretty technically competent and sophisticated because you have to interact with smart contracts on the Ethereum blockchain. There's some basic interfaces that we've built and that third-party developers have built, but almost all of them require you to store a private key in your browser using something like Metamask.”

He stated that, while this system may work fine for a retail investor, “it's not great for an institution with security procedures, multiple members of the organization, and deploying funds that aren't necessarily theirs — [where] people aren't keeping private keys in an unsecure structure.”

Instead, institutional players will use a multi-party key system that Fireblocks has built to put funds on the network. 

Fireblocks CEO Michael Shaulov said, “You can now put governance in place. For example, if someone wants to deploy a million dollars or half a million dollars into Compound, multiple users within the fund would need to approve that transaction.”

Shaulov further explained how integrating with Compound will allow its customers to benefit...

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