Sygnum Adds Banking Services for DeFi Tokens Including Aave and Uniswap

Swiss digital asset bank Sygnum is launching institutional-grade custody and trading services for a portfolio of decentralized finance (DeFi) tokens. DeFi refers to the sector of crypto that seeks to recreate many of the same offerings of traditional finance but without intermediaries. 

In an announcement, the bank revealed that it will launch regulated banking services for Aave (AAVE), Aragon (ANT), Curve (CRV), Maker (MKR), Synthetix (SNX), Uniswap (UNI), and 1inch (1INCH). Sygnum will also provide custody and trading for the stablecoin USD Coin (USDC).

Initially, the bank's clients will be able to invest directly in the portfolio of DeFi tokens; Sygnum revealed that it would also launch DeFi yield-generating products and services as well as unspecified "custom solutions" with DeFi partners. Sygnum's DeFi products and services will be "integrated seamlessly" with national currencies, cryptocurrencies, a digital Swiss franc, and asset tokens in a single account, the bank revealed.

"The innovations in the DeFi space have the potential to transform many of the existing traditional use cases in the financial industry," Thomas Eichenberger, Head of Business Units at Sygnum Bank, said in a press release accompanying the announcement. Eichenberger lauded the "very attractive return profiles" offered by digital asset products in the continued low-interest environment.

"Sygnum is pioneering a bridge between traditional and decentralized finance," said Curve CEO Michael Egorov, who anticipated more such bridges in the future.

DeFi activity dips

The news comes as a welcome boost for the decentralized finance sector, coming as it does in a month where DeFi activity on Ethereum has dipped significantly. 

Both trading volumes and transaction numbers slipped in May in what analytics firm Glassnode described as "a historically large decline" that's resulted in "almost completely clear mempools and waning demand for transactions and settlement."

Ethereum DeFi Activity Has Slowed Down to 2020 Levels

Let's start with the good news: Ethereum transaction fees, which have been growing larger, are back down to 2020 levels. The bad news: That's because demand for Ethereum and Ethereum-based DeFi protocols has fallen, along with prices, as partly evidenced by a 28% drop in Uniswap trades from a mid-May peak. Ethereum transfer volume, as measured in dollars, has declined by 60% in two weeks, according to a recent report by Glassnode Insights. DeFi: The Ultimate Beginner's Guide to Decentralized Fin...

It's not all bad news for DeFi, though; the decline in activity on the network has also seen transaction fees drop to 2020 levels. 

And as the price of Bitcoin crossed $40,000 earlier this week, prices for DeFi tokens including Aave, Uniswap and Compound rose in its wake, demonstrating an unusually high correlation with Bitcoin.