Wall Street’s Jane Street borrows $25 million via DeFi lending platform Traditional institutions are increasingly using DeFi loans


TradFi executives are getting closer and closer to DeFi.

Example: Jane Street, a Wall Street quantitative trading firm with over $300 billion in assets, took out a USDC 25 million loan from BlockTower Capital. The loan, worth $25 million, was facilitated by decentralized finance platform Clearpool, he said on May 3.

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Clearpool enables institutions to borrow unsecured loans through a network of lenders and is backed by venture capitalists including Arrington Capital and Sequoia Capital.

The deal marks the latest round of DeFi-TradFi connections. Cryptocurrency market leader Aave launched its institutional Arc platform earlier this year, rolling out to L2s Arbitrum and Optimism to offer low fees. In January, 30 establishments joined Aave Arc.

Clearpool launched its permissionless pools product in March, allowing whitelisted institutional borrowers to compete for stable loans from its network of lenders. The BlockTower and Jane Street pool is the first authorized product offered by the platform.

Although Jane Street has not confirmed how it will deploy the borrowed stablecoins, the company may be looking to generate yield in DeFi markets. Jane Street may consider increasing its loan to USDC50 million in the “near future”, according to Clearpool.

The move isn’t Jane Street’s first foray into crypto. Last month, he backed Near-based decentralized money market Bastion’s $9 million funding round. The company also acts as a market maker for Robinhood’s crypto markets and made its first cryptocurrency trades in 2017.

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Sam Bankman-Fried, CEO of centralized digital asset exchange FTX, previously worked at Jane Street, leaving the company just two months before founding quantitative trading firm, Alameda Research, in 2017.

Traditional financial institutions are increasingly exploring DeFi through collateralized and unsecured lending protocols.

In March, a governance proposal for MakerDAO, the protocol behind the decentralized stablecoin DAI, called for funding real-world asset-backed loans and partnering with under-collateralized lending protocols to expand its exposure. beyond the crypto markets.

Maple Sub-Collateralized Lending Protocol and unsecured lending platform TrueFi were quick to answer the call, proposing the creation of large DAI pools to fund institutional lending facilitated by their respective platforms. The two companies have funded more than $1 billion in loans, with Maple launching a year ago and TrueFi going live in November 2020.

Traditional financial institutions are also increasingly launching their own digital asset services.

Last year, State Street, a custodian bank with $40 billion in assets, announced it would launch a division offering crypto services to private clients. Bank of New York Mellon also plans to roll out a digital asset custody platform.

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