Five things you need to know about AQRU and crypto 2.0
Decentralised finance (DeFi) has emerged as a revolutionary global and open alternative to the existing financial system. It grants all internet-connected users free access, 24 hours a day, seven days a week, to financial products such as borrowing, lending, saving, trading and payments, without the need for traditional intermediaries. While still nascent (it started taking off less than two years ago), it has already amassed a considerable amount of capital in its various blockchain-based applications. The total value locked was close to US$100bn at end-2021, up significantly from US$10.3bn at end-2019, according to DeFi Pulse. It offers attractive yields to investors seeking high interest on their funds but, until recently, accessing DeFi was a complex exercise reserved for tech-savvy users. However, projects have emerged that allow the everyday investor to conveniently and securely access this opportunity. AQRU is one of them.
#1 AQRU is one of only a few listed equities focusing on the DeFi sector
The investible blockchain equities universe expanded last year, with a number of listed companies active in digital asset mining, brokerage, asset management, venture capital investments and payments. However, there are only a handful of listed companies primarily offering exposure to DeFi, including ARQU. The company was founded in 2019 and floated on the Aquis Stock Exchange Growth Market in April 2021. It recently filed for a listing on the NEO Exchange in Toronto and filed an application for its shares to be cross-traded publicly on the OTCQB Venture Market operated by OTC Markets Group.
#2 Attractive DeFi yields may facilitate growth in assets under management
AQRU’s solution currently offers a yield on selected stablecoins (cryptocurrencies with a value pegged to a given fiat currency such as the US dollar), including Tether, USD Coin and Dai. Moreover, AQRU’s retail customers can generate a 7% yield on their bitcoin and ether holdings. Customer funds are then deployed on decentralised exchanges, among others, to earn a fee on liquidity provisioning or pool-to-peer lending platforms (for more information, see this CoinShares report).
AQRU generates income by retaining a percentage of investor gains. As more digital asset investors realise that, on top of potential capital gains from price appreciation, they can also use crypto holdings in the DeFi sector for yield generation, the greater the opportunity for companies like AQRU to grow their assets under management in that way realises their scaling potential.
#3 AQRU could benefit from more institutional adoption
On top of its consumer-facing app, AQRU also has a ‘yield-as-a-service’ for institutional investors (or their customers), with bespoke deal terms for larger investment volumes, institutional-grade custodial and non-custodial solutions, and a treasury consultancy service. As institutional allocation to digital assets increases, AQRU’s addressable market becomes larger. The company’s institutional operations are run by its recently acquired subsidiary, DeFi Yield Technologies.
#4 Digital asset infrastructure has matured, allowing for increased security
The available solutions that facilitate trading and custody of digital assets have vastly improved in recent years. AQRU uses an institutional-grade, multi-signature custody solution from Fireblocks, one of the top players in the sector, which is collaborating with a number of top investment banks such as BNY Mellon (which also participated in the series C funding round last year). AQRU focuses on yield farming based on the largest and most liquid digital assets from established DeFi protocols with a robust audit track record and significant assets under management. And AQRU has a US$30m insurance policy in case assets are stolen. Nevertheless, this is not a risk-free investment. Investors still incur certain risks associated with high crypto asset volatility and the robustness of blockchain protocols and DeFi smart contracts.
#5 AQRU’s retail platform offers a convenient fiat on- and off-ramp solution
AQRU’s customers can deposit their crypto in another wallet. They can also use a credit card or bank transfer to move British pounds or euros to AQRU’s app, then buy crypto through Moonpay to start earning interest. Interest is accrued daily and users can withdraw their funds instantly without any restrictions.
AQRU is a client of Edison Group.
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