Breaking News

Anchorage adds custodial services for Compound governance token and the TrustToken stablecoin

#crypto #bitcoin

Anchorage was founded in 2017 to meet the growing need for institutional digital asset custody. Co-founders Diogo Mónica and Nathan McCauley have been working in the security engineering field for more than ten years.

As early employees at Square, they helped build software that now secures more than 100 billion dollars annually. When they joined Docker, they helped secure the core infrastructure used in top banks, governments, and the world’s three largest cloud providers.

The Anchorage Trust Company is a Qualified Custodian that helps SEC-registered investment advisers meet their obligations under federal law. The company provides a range of custody services, and allows clients to act on various crypto governance opportunities.

Governance opportunities come in many forms and comprise voting mechanisms that range from staked voting, as can be seen in EOS (EOS) and Maker (MKR), to self-amending exemplified by Tezos (XTZ), and the selected nodes voting found in DASH (DASH).

The Anchorage team raised a US$40 million Series B round last year, led by Blockchain Capital, and including Visa. They have since been busy adding assets to the Anchorage platform.

Compound is an algorithmic interest rate protocol built for developers building financial applications in the decentralized finance space. The Compound lending platform allows users to deposit digital assets and earn interest on them, or use their assets as collateral for loans.

The Compound Governance protocol was launched on April 16. This means the Compound team is no longer the administrator of the protocol, as it moves towards full decentralization. To achieve this they have removed the largest single point of failure, the Compound team, and introduced a governance system that replaces the team's administrator with community governance, allowing Compound users to suggest and vote on changes to the protocol.

Voting and other governance activities are executed using the Compound governance token, COMP. An ERC-20 token, COMP lets users delegate voting rights to any blockchain address, such as the owner’s wallet, another user, an application, or a trusted third party. Anybody is able to participate in Compound governance if they are a nominated delegate, without having to own COMP. The token is coded to query the historical voting weight of an address, which provides valuable data to help build out complex voting systems.

The COMP governance asset contract has been deployed and can be inspected at this address.

Brave New Coin spoke to Diogo Monica, President of Anchorage. He said he was not concerned by the recent exploits in the DeFi space and that Compound’s COMP asset was reviewed as part of the custodian’s usual process.

“Anchorage reviews every asset that we support, and we have a robust asset support framework we follow before supporting any assets, protocols, or active participation features. Anchorage’s mission is to increase institutional participation in the crypto space, and DeFi is where a lot of the most exciting innovations are happening right now.”

“We've just scratched the surface of the potential of DeFi,” said Rober Leshner, CEO of Compound. “As the ecosystem expands and evolves, platforms like Anchorage will be integral to the creation of a new kind of marketplace where crypto is used rather than simply held."

This is the point of difference that Anchorage says it provides. Investors faced a trade-off between securing digital assets in cold storage, and actively participating in staking and governance. As new proof-of-stake assets emerge with complex network activity functions, custodians need to provide storage solutions that are as secure as cold storage, but also allow asset owners to use the assets as intended.

However, Services are not yet offered to residents of New York, while Coinbase Custody is a fiduciary under NY State Banking Law. Coinbase Custody operates as a standalone, independently-capitalized business to Coinbase, Inc. Coinbase Custody is a fiduciary under NY State Banking Law.

Launched in 2018, Coinbase Custody offers clients access to the secure, institutional-grade offline storage solution that has been used by the Coinbase exchange business since 2012. The platform offers custody solutions for more than 50 crypto assets, including Compound. Celo Gold support, however, is not listed.

Coinbase recently launched Coinbase Custody International Inc., a European entity for handling cryptocurrency deposits. "Our international launch is aimed to meet the demands of institutional investors in Europe and beyond," Coinbase wrote in its blog post.

At the same time, Ledger recently announced a partnership with South Korean blockchain platform FLETA to provide compliant custody services across Asia. The company is also building a new firm with Global Advisors and Japan’s financial services behemoth Nomura. The company called Koimanu is going to offer institutional investors digital asset management services.



Andy Pickering, Khareem Sudlow