Crypto Custodian Copper needs to shut the hole between DeFi and conventional financing with a brand new device
The crypto custodian bank Copper wants to connect institutions with the emerging world of decentralized finance (DeFi) with a newly presented product.
CopperConnect was announced on Friday and is a bridge between Copper's existing storage services and the DeFi apps. In a press release for the new tool, Copper claims that DeFi risks have decreased, making the speculative field more attractive to institutional clients.
“In the past, the DeFi area was seen as too volatile for many crypto funds. In recent months, however, the number of unchecked DeFi projects (i.e. projects where their smart contracts have not been security checked by third-party experts) has decreased and the fluctuations in value of DeFi markets have become less dramatic ” said Copper.
However, Aave CEO Stani Kulechov said in the press release that the number of institutions looking to inject liquidity into our project "has increased significantly".
The press release does not name or cite any institutional client who may have expressed DeFi's curiosity about Copper. The launch didn't respond to a CoinDesk request for comment at the time of going to press.
Copper's new financial installations provide an opportunity to “comply with strict risk management rules for (institutions),” Kulechov continued.
CopperConnect is an infrastructure system that provides security throughout the custody, transfer and locking process as an asset finds its way to a smart DeFi contract. The Google Chrome application or browser extension is intended to connect Copper's MPC (Multi-Party Computation) custody system to both central 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 whether the service will work with all DeFi applications.
According to Aave's Kulechov, the system eliminates almost all operational risks. Katrina Daminova, Copper Product Manager, suggested increasing efficiency.
In September, crypto firm Trustology unveiled a “DeFi firewall” for its suite of institutional investment vehicles, which is also designed to close the gap between traditional and decentralized funding. While Curv, another crypto custodian, now offers institutions access to the leading DeFi protocol connection.
In February, Copper raised $ 8 million in fresh capital to expand into new markets. "Since 2017, many crypto-custody solutions have emerged that do not fully meet the requirements of institutions," said Dmitry Tokarev, CEO of Copper. "Instead, they have created an institutional framework that does not yet exist and probably never exists, and is discouraging the institutions."