DeFi Giant Takes Strategic Step Toward Institutional Adoption

The Aave decentralized finance (DeFi) protocol has cleared a major hurdle in its expansion into centralized financial services, with community members overwhelmingly backing a proposal to license its technology to Kraken's Ink blockchain. The preliminary vote saw 【99.8%】 approval, marking one of the most decisive governance decisions in Aave's history.

Hybrid Model Bridges DeFi and Traditional Finance

Under the proposed arrangement, Aave would create a whitelabel version of its v3 lending protocol specifically for Ink Foundation's institutional-focused blockchain. This represents a strategic pivot for the traditionally decentralized platform, combining Aave's technical infrastructure with Kraken's compliance-ready layer-2 solution.

——"This partnership could redefine how institutional players access DeFi services,"—— noted the proposal, emphasizing Ink Foundation's commitment to provide over 【$250 million】 in liquidity incentives. The deal includes revenue-sharing terms guaranteeing Aave DAO at least 5% of borrow volume across all pools.

Technical and Governance Next Steps

With the initial ARFC (Aave Request for Comment) phase completed, developers will now draft a formal AIP (Aave Improvement Proposal) for onchain voting. The transition from offchain signaling to binding governance vote typically takes 2-3 weeks in Aave's ecosystem.

Interestingly, the move comes as Aave's total value locked (TVL) shows volatility—peaking at 【$40.3 billion】 in May before settling at 【$33.5 billion】 currently. This positions Aave as the second-largest DeFi protocol behind Lido Finance's 【$34.3 billion】 staking empire.

Institutional DeFi Landscape Heats Up

Kraken's Ink blockchain, launched in late 2024, represents crypto exchanges' growing push into compliant financial infrastructure. The platform specifically targets tokenized assets and institutional-grade DeFi applications—a market segment projected to grow 【300%】 by 2026 according to recent analysis.

The Aave partnership signals maturing convergence between decentralized and traditional finance, with major protocols increasingly adapting their models for regulated environments. As one industry observer noted, ——"The lines between CeFi and DeFi are blurring faster than anyone predicted."——

What This Means for Crypto Markets

For investors, the development highlights two key trends: First, DeFi protocols are actively pursuing institutional capital through compliant channels. Second, exchanges like Kraken are betting big on blockchain infrastructure beyond simple trading services.

Market analysts suggest successful implementation could create a blueprint for other DeFi-CeFi hybrid models, potentially unlocking trillions in traditional finance assets for onchain utilization. The next critical milestone comes when the AIP undergoes onchain voting, expected within the coming month.