Metamask Institutional: Exploring the Benefits of Decentralized Finance

| November 17, 2023

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Metamask Institutional Staking

MetaMask, renowned for its iconic orange Fox avatar plug-in, is widely regarded as a prominent self-custodial crypto wallet within the web3 ecosystem. It serves as a gateway to a wide range of Ether (ETH, valued at $1,913) -based tokens, decentralized applications (DApps), and decentralized finance (DeFi). In 2022, this retail browser plug-in wallet achieved an impressive milestone, surpassing 30 million users worldwide. Encouraged by its expanding user base, MetaMask has been gradually redirecting its focus towards catering to the needs of institutional investors. Recognizing the escalating demand for exposure and asset management in the flourishing DeFi space, MetaMask Institutions aims to accommodate the requirements of this growing demographic.

Key Takeaways

  • With MetaMask Institutional, institutional investors get the opportunity to participate in the world of decentralized finance (DeFi).

What is Metamask? 

MetaMask primarily functions as an Ethereum wallet but can securely store all types of cryptocurrencies. Its installation process is like any other browser extension. Once installed, it empowers you to securely store Ether and various ERC-20 tokens, facilitating transactions with any Ethereum address.

This popular cryptocurrency wallet and browser extension empowers crypto-holders to store, send, and receive Ethereum-based digital assets. It seamlessly bridges your browser with the Ethereum blockchain, facilitating effortless interaction with decentralized applications (dapps) and the Ethereum network. Additionally, MetaMask facilitates private key management and interaction with smart contracts for you.

Through integration with Ethereum-based decentralized applications (dapps), MetaMask enables you to utilize crypto-coins within the virtual-verse, stake tokens, participate in decentralized finance projects, and engage in crypto-trading activities on decentralized exchanges (DEXs).

Furthermore, MetaMask allows crypto holders to access various DeFi applications such as Compound and AAVE, serving as an entry point for exploring the thriving Decentralized Finance market.

What is Metamask Institutional? 

Metamask Institution (MMI) is an extension of MetaMask services. This service is tailored to meet the needs of enterprises across the globe. It incorporates enterprise-grade security measures and operational functionalities, leveraging the world’s most trusted crypto-wallet. This strategic enhancement aims to enable cryptocurrency funds, family offices, and financial institutions to seize the diverse opportunities presented by decentralized finance in the Web3 ecosystem.

With the introduction of Metamask Institutions, these entities can leverage institutional features to engage in various activities such as token swapping, borrowing, lending, investing, and seamless interaction with Decentralized Finance protocols and applications. The familiar MetaMask interface ensures a user-friendly experience while accessing these cutting-edge features.

In addition, MetaMask Institution offers an upgraded portfolio dashboard equipped with a comprehensive suite of cutting-edge analytical tools for enterprises. These tools include portfolio management features, digital asset monitoring capabilities, in-depth transaction reporting, and institutional controls. These robust functionalities empower organizations to effectively manage their interactions within the web3 landscape, enhancing their overall engagement with decentralized finance.

Upsides of MetaMask Institutional:

MetaMask Institutional offers you a range of compelling benefits:

  • Unmatched Dapp accessibility
    Almost all web3 Dapps within the decentralized finance ecosystem are designed to integrate with MetaMask Institutional seamlessly. This seamless integration ensures effortless connectivity with decentralized finance protocols, allowing you to stay at the forefront of DeFi innovation.
  • Enhanced safety, security, and efficiency in crypto-investment processes
    The current trade-flow processes often involve multiple transactions, approvals, and associated gas costs. MetaMask Institutional addresses these challenges by integrating with the renowned custodian, Curv. This integration provides operational requirements, risk management, and trade-flow efficiency solutions, resulting in a safer, more secure, and streamlined investment experience.
  • Enterprise-level security and compliance measures
    Capital deployment into decentralized finance applications is simplified through MetaMask Institutional, thanks to its robust support for multi-signature functionality. Furthermore, it incorporates built-in compliance mechanisms to ensure adherence to regulatory standards. Additionally, MetaMask Institutions facilitate direct integration with leading custody providers, reinforcing enterprise-grade security measures.

By leveraging MetaMask Institutional, you can benefit from unparalleled access to Dapps, streamlined investment processes, and enhanced security and compliance features, empowering them to navigate the decentralized finance landscape confidently and efficiently.

What is Decentralized Finance DeFi?

Decentralized finance (DeFi) represents an innovative framework that facilitates cryptocurrency-based transactions, exchanges, and financial services. It deviates from traditional financial models that depend on fiat currency and centralized financial institutions. Unlike centralized systems, which rely on a central authority to govern operations and transaction flow, DeFi operates on the principle of decentralization, providing greater power and control to individuals.

In the Decentralized Finance paradigm, no single central authority dictates the rules. Instead, authority is distributed across a network in a decentralized manner, empowering individuals. Within this model, peer-to-peer (P2P) interactions enable various activities such as purchasing, selling, lending, and making payments using cryptocurrencies without needing a central entity.

Asset custody plays a crucial role in any financial system. In DeFi, traders have direct control over their private cryptographic encryption keys, ensuring the safekeeping of their cryptocurrency assets. Smart contracts, often deployed on Ethereum-based blockchains, facilitate financial transactions within the Decentralized Finance ecosystem.

Moreover, the decentralized finance model encompasses decentralized exchanges (DEXs), which connect individuals seeking to execute cryptocurrency transactions. Additionally, DeFi is frequently associated with decentralized applications (dApps), predominantly designed for financial services use cases.

Notable Benefits of Decentralized Finance:

DeFi presents you with a range of advantages that foster confidence, security, and trust in cryptocurrency-based transactions and applications. These benefits include:

  • Decentralization
    Unlike centralized finance (CeFi), Decentralized Finance (DeFi) operates in a decentralized manner, mitigating the risks associated with exchange failures that could lead to complete collapses and the loss of user funds and accounts.
  • Pseudo-Anonymous
    While smart contracts may be transparent on the blockchain, DeFi does not necessitate user identification. Unlike centralized and regulated models that often require Know Your Client (KYC) procedures, DeFi offers a level of anonymity.
  • Permissionless
    DeFi’s decentralized nature eliminates the need for a central authority to authorize or facilitate transactions. Instead, the programmatic logic of smart contracts governs what is possible, creating a permissionless environment.
  • Lower Fees
    DeFi operates without a central authority, leading to the promise of lower transaction fees compared to the CeFi model. This affordability enhances accessibility and makes DeFi an attractive option for users.
  • Transparent
    Through the utilization of smart contracts, DeFi enables users to comprehend the terms and logic of transactions transparently, without hidden code. This transparency promotes trust and understanding.
  • Custody
    In decentralized finance, you retain control over their assets as you hold the cryptographic private key for their cryptocurrency tokens. This self-custody model enhances security and user autonomy.
  • DApps
    Decentralized finance allows you to access various financial services and explore various use cases, including gaming and social media, within a decentralized ecosystem.

By harnessing the power of decentralization, permissionlessness, transparency, anonymity, self-custody, dApps, and cost-efficiency, DeFi empowers you with a robust framework that fosters trust and improves the overall user experience within the cryptocurrency ecosystem.

Conclusion

The emergence of decentralized finance (DeFi) has significantly influenced the introduction of MetaMask Institutional, providing companies with a secure avenue to enter this innovative landscape. MetaMask has garnered widespread acclaim due to its ability to provide users with a flexible and straightforward solution for storing cryptocurrencies and swapping tokens on the Ethereum blockchain.

One of MetaMask’s standout features is its commitment to minimizing reliance on intermediaries. This aspect resonates strongly with users, who highly value the platform’s dedication to reducing unnecessary interference and enabling more direct interaction with the decentralized ecosystem.

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More on Crypto

As we continue constructing a fully regulated digital asset custody platform, ensuring secure storage for both crypto and fiat assets remains a critical priority. 

To facilitate the last checkpoint of enabling institutions to convert their digital asset treasury into fiat currency, we’re expanding beyond pure wallet infrastructure and integrating seamless fiat off-ramp capabilities for our partners.

We’re thrilled to announce our partnership with Encryptus, licensed and compliant off-ramp solutions tailored for institutional clients. This collaboration elevates Liminal’s service offerings by empowering our partners to convert their digital asset treasuries into fiat currencies efficiently.

Integrating A Seamless Off-Ramp Solution

The digital asset ecosystem historically faced friction points when transitioning between fiat and cryptocurrencies. Off-ramp solutions address this pain point by enabling efficient and streamlined conversion between asset classes, minimising value loss and simplifying compliance processes.

Here’s how off-ramp changes the game:

  • Reduced Friction: Frictionless conversion minimises delays and operational complexities associated with traditional fiat-crypto exchange methods.
  • Enhanced Efficiency: Streamlined workflows expedite asset conversion, increasing speed and cost-effectiveness for institutional and individual users.
  • Optimised Value Preservation: Advanced off-ramp solutions prioritise minimising price slippage and value loss during conversion, protecting user portfolios.
  • Simplified Compliance: Integrated compliance features navigate regulatory complexities, ensuring adherence to relevant financial regulations.

With our partnership with Encryptus, we have embedded their institutional-grade APIs, connecting their off-ramp solution within Liminal’s wallet and custody platform. 

This integration simplifies our clients’ liquidation requirements while keeping their assets secure and more:

  • Effortless Digital Asset to Fiat Conversion: Our partners will be able to access treasury management and facilitate business payments in 54 countries and individual payments in an extensive network of 80+ countries.
  • Streamlined Compliance and Regulation: Our partners will be able to leverage Encryptus’s rigorous licensing and compliance framework, ensuring adherence to stringent financial regulations.
  • Enhanced Platform Value: We will be able to expand the functionality of the Liminal custody solution, attracting institutional users seeking comprehensive digital asset management capabilities.

Moving Towards A Robust Off-Ramp Partnership With Encryptus

The partnership between Liminal and Encryptus earmarks a significant step forward in secure digital asset custody, representing a shared commitment to pushing compliant practices while supplying institutions with easy access to convert their digital assets to fiat. 

For Encryptus, the opportunity to integrate with Liminal’s established platform presents a chance to reach a wider audience and scale their innovative off-ramp solutions to new heights. By streamlining fiat conversion within Liminal’s secure custody infrastructure, Encryptus gains access to a trusted network of institutional users seeking seamless and compliant treasury management.

For Liminal, this collaboration reinforces our dedication to partnering with companies that demonstrably prioritise clear governance and robust policy frameworks. By aligning with Encryptus’s stringent compliance standards, we reaffirm our commitment to building a secure and sustainable future for digital assets, where trust and regulatory certainty go hand-in-hand.

January 22, 2024

Hello world, it’s that time of the month when we share the biggest security breaches in the world of Web3 through our Security and Regulatory Newsletter. 

Liminal believes in optimizing security and custody practices globally across the Web3 industry. Through our Newsletter, we highlight security, regulations, and compliance incidents that have happened in the past month and how one can follow better Security practices to safeguard their digital assets. 

We will also highlight regulatory changes that might have happened globally, which were significant to the overall ecosystem.

Dive in and get a detailed analysis of everything security and regulation in the domain of web3 with Liminal’s Monthly Security and Regulatory Newsletter.

Web3 Security Compromises in January

Abracadabra exploited for almost $6.5 million, Magic Internet Money stablecoin depegs

The Magic Internet Money ($MIM) stablecoin has lost its dollar peg again, dipping all the way below $0.77 in a flash crash before returning to around $0.95.

The depeg appears to be related to an exploit of the Abracadabra lending protocol, which allows people to borrow $MIM. An attacker exploited an apparent flaw in the platform’s smart contracts to drain around $6.5 million.

Goledo Finance hacked for $1.7 million

Goledo Finance, an Aave-based lending protocol, was exploited through a flash loan attack. The attacker stole assets estimated by CertiK to be around $1.7 million.

Goledo Finance contacted the attacker to offer a 10% “bounty” for the return of the remaining assets. In a message on January 29, the attacker wrote: “I hacked Goledo and want to negotiate.”

Socket service and its Bungee bridge suffer $3.3 million theft

The Socket cross-chain infrastructure protocol was hacked for around $3.3 million in an attack that exploited its Bungee bridge. The thieves were able to exploit a bug that allowed them to take assets from those who had approved a portion of the system called SocketGateway.

A little over 700 victims were affected, and the highest loss from a single wallet was around $657,000. 121 wallets lost assets priced at more than $10,000.

On January 23, the protocol announced they had recovered 1,032 ETH (~$2.23 million) of the stolen funds.

Web3 Regulatory Practices for January

The EU Imposes Stricter Due Diligence Rules for Crypto Firms

On Jan. 17, the European Council and the Parliament came to a provisional agreement on parts of the Anti-Money Laundering Regulation (AMLR) that now extends to the crypto sector.

Under the new rules, cryptocurrency firms will be required to run due diligence on their customers involving a transaction amounting to €1,000 ($1,090) or more. 

However, the agreement isn’t final yet as it has to be first officially adopted by the Council and Parliament before the rules can be applied.

So, after the EU passed its landmark MiCA regulation last year, which clarified rules about cryptocurrencies, regulators are now targeting the space with tighter controls. 

While these regulations bolster security and trust in the crypto market, potentially attracting more cautious investors and combating financial crimes, they also present challenges. 

The US State of Virginia Introduces Digital Assets Mining Rights

Recently, the Virginia State Senate introduced Bill No. 339, which outlines regulations for the transactions and mining of digital assets and their treatment under tax laws. 

The legislation exempts individuals and businesses engaged in crypto mining activities from obtaining money transmitter licenses. Additionally, it protects miners from any discrimination. 

Issuers and sellers of crypto are also exempted from securities registration requirements if certain conditions are met. Moreover, those offering mining or staking services are not to be classified as “financial investment” but must file a notice to qualify for the exemption.

The bill further incentivizes crypto’s use for everyday transactions by offering tax benefits. Under this, up to $200 per transaction can be excluded from an individual’s net capital gains or gains derived from using crypto to purchase goods or services, starting from Jan. 1, 2024.

Key Takeaways:

  • Hackers continue to exploit vulnerabilities in DeFi protocols and cross-chain bridges, highlighting the need for robust security measures.
  • Regulatory frameworks are evolving rapidly, with stricter AML rules and supportive legislation for emerging technologies like crypto mining.
  • Staying informed about these developments is crucial for navigating the digital assets market safely and responsibly.

Stay #LiminalSecure

These events highlight the constant evolution of Web3 security and regulation. You can confidently navigate this dynamic landscape by staying informed and prioritizing security best practices. 

At Liminal, we’re committed to empowering institutions to unlock the full potential of digital assets without compromising security or compliance norms with our robust custody and wallet infrastructure solutions. Join us on this journey towards a safer, more accessible future for digital assets.

January 15, 2024

Buckle up as we’re about to take a trip down memory lane. 

The year 2023 was a wild ride that showed signs of a plummeting market, groundbreaking innovation and regulatory hurdles. 

Contrastingly, in the same year, we saw no market-shattering crashes. Financial institutions extending an olive branch, key jurisdictions unlocking the doors to blockchain technology. 

Simultaneously, at Liminal, we experienced significant breakthroughs, re-engineering our positioning and becoming a pioneer in digital asset security with bank-grade custody. 

We took major strides this year, right from building comprehensive products to becoming a qualified custodian, from revamping our brand design to expanding our offices in newer locations, from partnering with hyper-local communities to onboarding a diverse set of clients,  we did it all. 

So, let us take you through everything we accomplished in 2023 and what the future holds.  

Liminal Became A Qualified Custodian

One of the prominent moves we made this year was to change our positioning as a regulated custodian from being a wallet infrastructure platform. 

We got two licenses in key jurisdictions to operate as a regulated custodian. 

The first one came from Hong Kong, where we acquired the TCSP license issued by the SFC, which oversees and regulates financial activities to ensure compliance with legal and regulatory obligations. 

Our next license came in the MENA region, where we got In-Principle Approval for the FSP license granted by the FSRA, a governing body in ADGM, to establish a progressive financial services environment. 

Both these licenses paved the way for Liminal to push its wallet infrastructure and offer bank-grade custody to institutions looking to operate in these particular regions. 

Liminal Introduced A Suite of Products & Features

Continuing our building spree, we launched new products and integrations to broaden the existing infrastructure and added more parameters of security, scalability and sustainability. 

Staking-as-a-Service

Liminal launched staking for institutions to eliminate the risks involved in running staking nodes and the vulnerabilities in hot wallet transfer. 

Hence, we introduced an industry-first mechanism of cold wallet staking to ease staking for institutions and secure assets explicitly.  

Whitelabel Solution

Accelerating the go-to-market time for organisations looking to build a secure and customisable application, Liminal launched its whitelabel solutions

Targeted to help organisations meet security standards, manage assets with maximum control, and add their custom branding to give it a personal touch. Our whitelabel solution is a first-in-class custodian-developed solution for institutional grade custody.

Smart Consolidation

We are building not just secure custody but also automation-based features to eliminate manual errors, increase the throughput of transactions and scale institutional wallets. 

Taking this ahead, we launched the Smart Consolidation feature to automatically calculate all the active addresses and consolidate them into a single address. With this level of automation, managing multiple addresses becomes uber easy for wallet teams. 

Travel Rule 

To limit the use of cryptocurrencies for activities like money laundering and terror financing by regulatory bodies, travel rule was mandated for institutions to follow. 

Continuing the latest compliance integration policy, Liminal partnered with Notabene to introduce Travel Rule, enabling institutions to manage counter-party risk and extend the process of due diligence right from the Vaults dashboard.   

Liminal Accured List Of Security Certifications

Following our ISO certification for data privacy and risk management, we added two new security certifications to fortify our systems and build trust for our clients. 

Liminal Achieves Crypto’s Highest Security Mark: CCSS Level-3 Certified

Cryptocurrency security lacked a gold standard, creating a vulnerable ecosystem. Enter the CryptoCurrency Security Standard (CCSS), setting the bar for auditing and certifying custodian infrastructure and establishing levels of trust and confidence for investors. 

Liminal became only the second wallet infra platform and the first regulated custodian to be accredited with Level-3 certification, deeming wallets, transfer environments, workflows and engines safe and secure. 

Liminal Reciueved SOC 2 Type II Certification

To tackle threats in institutional-grade security, organisations’ SOC has been identified as the primitive compliance standard for service organisations to handle customer data.

Liminal successfully attained SOC 2 Type II certification, validating its setup of security controls & compliance processes to be industry standard. 

Liminal Level Up

Liminal unveiled its most significant platform upgrade ever, revolutionising the future design standard of a qualified custodian. This level-up activity included revamping our website and product UI, giving a completely new look and feel to not “Liminal” but “Liminal Custody”. 

The Liminal level-up activity was a strategic step and the biggest one for us this year to create an intuitive, inviting and tailored experience for our clients. 

Liminal Reached New Borders

We spread out our operations this year, reaching new borders and onboarding a new wave of institutions across gaming, DeFi, HNI wealth, treasuries, and exchanges! From Indonesia and Africa to India, UAE, and Korea, we are setting up custody operations worldwide. 

This isn’t just a roster of clients; it’s a network ready to spark connections, collaborations, and shared success to further the definition of secure assets. 

Liminal Collaborated With Law Enforcement Agencies

The best and the proudest moment of Liminal for this year was when we collaborated with CBI & Himachal Prashesh police department to aid them in seizing digital assets. 

This partnership put us on the map, as we became the first point of contact for LEAs in India, and we standardised the process of secure seizure of digital assets. Leveraging our expertise, we enabled a safe space for officers to learn the basics of custody, contributing to a safer digital landscape.

Team Liminal Grew Bigger

Building such a massive infrastructure, prioritising security and compliance over everything else, we had to grow the team to build at pace and expand at an even higher level. Not only did we grow in team numbers, but we also elongated our footprint to new destinations. 

Team Liminal went from 32 to 70 with 5 new offices in Mumbai, Ahmedabad, Hong Kong, Singapore and ADGM, setting up our custody operations steadfastly. 

What’s To Look Out For In 2024

We are excited to announce that our commitment to integrating the most secure digital asset wallets with a cutting-edge custody platform is swiftly becoming a reality. 

The upcoming year, 2024, will serve as a testament to this transformative journey. Moving beyond self-custody, we are constructing a comprehensive infrastructure encompassing both custodial and non-custodial wallets. Exciting products are set to launch starting from the first week of January, some of which are: 

  • Official Custody Platform Launch
  • Liminal’s Off-Exchange Settlement Hub
  • Secure Custody of Real-World ‘Tokenised’ Asset

The Web3 space has evolved explicitly this year, pushing the narrative of secure digital asset custody and security, introducing new regulations and compliance standards, licensing VASP providers and standardising the use of custodians as a trusted third party. 

At Liminal, we took major strides this year, from building comprehensive products to becoming a regulated custodian, from revamping our brand design to building the full infrastructure of custodial and non-custodial wallets.

January 5, 2024

Find Out How You Can Benefit From A Fully Self-Custodial Wallet Architecture