Anchorage, a cryptocurrency custodian, is expanding its operations to include governance services for decentralised financial tokens, according to a press release.
Upon the launch of the dYdX governance token, Anchorage Digital will be able to take custody of the token on behalf of its customers, the company announced today in a press release.
dYdX comes under the third category, and it is one of the several Ethereum-based protocols that allow for lending, borrowing, and/or trading without the use of financial intermediaries (as opposed to traditional banking). Customers can use dYdX the exchange to make high-leverage trades because the company developed it to allow them to do so.
Traders can obtain access to up to 25 times the amount of collateral they put down on the exchange. According to data compiled by DeFi Pulse, it is the third-largest platform for derivatives trading on Ethereum, with more than $300 million in assets traded on the platform each day.
However, the company wishes to decentralise the decentralised exchange to a greater extent. In order to accomplish this, it will require a governance token, which will allow users to vote on protocol modifications as well as market structure alterations.
On August 3, the dYdX Foundation, which would be in charge of issuing the tokens, was officially established by the corporation. Forked from Aave’s own governance token, the DYDX token will be used on the Ethereum network and will be backed by the Ethereum network.
As seen by Anchorage’s adoption of the asset, there is a rising desire among institutional investors, whom the company serves, to participate in DeFi governance without having to manage their own tokens. It provides governance services for tokens such as AAVE and SUSHI, in addition to serving as a centralised repository for assets.
The service is marketed as “on-chain participation with offline assets.” according to the company. Additionally, the addition indicates that Anchorage plans to grow its main business following its approval in January to become the first digital asset bank to be granted a federal licence under the Patriot Act.
Anchorage Digital Bank will be able to sidestep state-by-state laws while establishing sub-custody arrangements with regular banks, like as the newly announced cooperation to deliver Ethereum-backed loans to BankProv customers.
At the time of writing, Anchorage supports 57 digital assets, including stablecoins such as USDC, market capitalization leaders like as Bitcoin and Ethereum, and decentralised finance governance tokens such as Compound.
