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Fireblocks, a crypto security company invested by global asset management giant Fidelity, has integrated the DeFi platform Compound to allow its customers to earn interest through Compound's lending agreement. In June 2019, Fireblocks raised $ 16 million in Series A funding from Cyberstart, Tenaya Capital and Fidelity International's investment arm Eight Roads.
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According to a Tuesday press release from The Block, Fireblocks customers can now deploy assets stored in the Fireblocks Hot Vault into Compound and start earning passive benefits.
Fireblock uses multi-party computing (MPC) to protect the transfer of user assets. Traders can store their assets in the Fireblocks Hot Vault, which provides online and offline storage capabilities and can transfer funds between wallets.
Kevin Yedid-Botton, principal of DeFi-focused investment company ParaFi, said that at present investors must use a web wallet or hardware wallet like MetaMask to access platforms such as Compound, which is not ideal for institutional traders. He stated:
"If you're like a retail user with only a few thousand dollars in your wallet, that's fine. However, if your income is high, you definitely don't want to use the MetaMask wallet to interact with Compound with millions of dollars."
In this regard, Tiantian Kullande, co-founder of Amber Group, agrees with Yedid-Botton. Kullande said that for most people, it's hard to imagine having one person manage an important MetaMask plugin and trade millions of dollars in corporate capital. He says:
"I think most trading companies and OTC help desks now use Fireblocks because it enables you to transfer funds through MPC because MPC creates the keys separately and does not face the risk of key custodians. To do this integration "It is necessary to allow institutional enterprises to integrate with a pure DeFi platform, which can bridge the gap we see now."
On the other hand, Kullande said that they may not take full advantage of the new feature due to the low interest rates currently offered on Compound. For example, the average 30-day interest rate on ETH loans on Compound is only 0.01%.
