How MetaMask will use Brazilian technology for a new institutional portfolio

Two weeks ago, global crypto fintech company Parfin announced a partnership with US blockchain infrastructure firm Conssensys to provide security for its MetaMask crypto wallet, especially for institutional clients, in a scenario of strong demand from managers and large institutions. .

“When you talk about institutional clients, banks and brokers, everyone is looking to offer crypto assets to end customers. This movement is accelerating,” Marcus Ferriato, CEO of Parvin, assesses in an interview with Infomoney.

For him, the bill regulating the cryptocurrency market in Brazil – which was approved in the Senate this week – will help further accelerate this environment. “The time that [o mercado] Subject to regulation, there will be a rush, and crazy adoption of cryptocurrencies,” he says.

MetaMask is one of the best cryptocurrency wallets in the market, but it is mainly aimed at individuals. Now, with the partnership, Parfin is one of those responsible for providing the necessary security for the recently launched MetaMask Foundation, aimed at institutional investors.

“Today, access to DeFi (Decentralized Finance) protocols is a complex matter […]’Access is complex, you’re going to implement a process, you have to understand the protocol, it’s not trivial, and we’re facilitating that access for institutional clients, and that’s been our focus,'” says Ferriato.

Unlike the individual client, institutional investors need robust security solutions to invest in cryptocurrencies. When someone decides to seize their assets in their own wallet, they still run the risk of, for example, hacking their computer and they still lose their cryptocurrency.

For a large fund or bank, while easy access to assets is essential, it is also essential to have a security solution that prevents a problem with the manager’s equipment from creating risks. “We have integrated the service into the enterprise MetaMask, where private keys are stored within our custodial solution, and allow customers who use our more professional system to access those services they may be using in a more secure way,” the executive explains.

In short, this Parfin escrow solution uses MPC technology, which splits each private key into several parts, stored on several different servers. At the time of initiation of the transaction, these keys are partially signed, and the encryption software validates and collects these signatures.

Encoder input

Viriato states that there is a huge demand from institutional clients for cryptocurrencies, especially for two types of transactions: yield farming and storage.

In the first paradigm, the solution in free translation means the development of interest. In it, the customer can borrow his assets, such as Bitcoin (BTC), and put them into a smart contract, given that he does not want to sell now because he believes in their appreciation.

In this system, which uses the DeFi protocol, this customer lends and charges a fee for it. Values, according to Parfin CEO, can exceed 35% annually, in the case of Axie Infinity ([ativo=AXIE]), but emphasizes that this type of asset also tends to take on more risk, so it pays better.

“There are many players who believe in long-term appreciation [das criptos]However, they want compensation for those assets, and DeFi allows it,” Veriato explains. “You take in mutual funds, especially institutional clients, he buys, he has a lot of cryptocurrency, and he wants to borrow to pay it off.”

In the case of staking, the idea is also to receive a reward from the cryptocurrency that the investor owns, but in this case the process involves holding those assets on the blockchain for a specified period of time to contribute to the security of the system, and getting some reward in return. (See more by clicking here).

He concludes, “Through our integration, we will make it easier for a professional manager to customize, as well as having a lot more security than having a manual solution.”

Integration and next steps

In terms of integration, Viriato says that MetaMask already has 30 protocols on its platform and that the intention is to add more. “As of our mandate, we have already merged two, Compound (COMP) and Aave ([ativo=AVE]), but doing it directly is too complicated,” he says of the difficulty of doing integrations alone with protocols.

Enterprise MetaMask acts as a bridge, we don’t need to do the integration, it does. They obviously charge for it, but you don’t have to worry about all the protocols,” he says.

Finally, the CEO recalls that Parfin is on the cusp of approval by the FCA (UK market regulator) and that this will be important even for its Brazil operations. “We expect it to be released in May,” he concluded, stressing that there is other news on the radar.

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