Chainlink has launched CustodySync, letting qualified custodians give clients access to DeFi lending, with Anchorage Digital as launch partner.
Chainlink has introduced CustodySync, a solution that allows qualified custodians to give their institutional clients access to decentralised finance (DeFi) lending markets while their assets remain in custody. Anchorage Digital Bank is the official launch partner. CustodySync is designed to let institutions borrow against custodied digital assets that would otherwise sit idle, without moving them out of their existing custody arrangements.
The gap between custody and DeFi
According to Chainlink, digital assets under custody total roughly USD 700 billion, less than 0.5% of the USD 250 trillion in traditional assets under custody, while DeFi lending markets hold more than USD 80 billion in deposits and over USD 30 billion in active loans. Many institutions are required by regulation, investment mandates, or internal risk policies to keep assets with a qualified custodian. Accessing DeFi lending has typically required moving assets out of custody, which conflicts with these policies, including limits on direct exposure to smart contract risk.
Custody systems and onchain lending protocols were not designed to work together. If a custodian tracks collateral status and loan-to-value ratios in its own system, separately from how a lending protocol tracks the same positions onchain, the two can fall out of sync because of differing data or delays between systems. Each side may then reach a different conclusion about when a margin call or liquidation is due, potentially triggering the liquidation of a healthy position or delaying it until the collateral no longer covers the loan.
Shared data across the loan lifecycle
CustodySync keeps a custodian’s existing systems and DeFi lending markets aligned across the full lifecycle of a loan, from deposit and borrowing through to repayment and liquidation. The custodian retains control of its clients’ assets, while both the custodian and the lending market act on the same verified data delivered by Chainlink.
Anchorage Digital’s custodial infrastructure and its Atlas Collateral Management product work alongside lending protocols, giving borrowers the tri-party arrangement familiar to institutions, with Anchorage Digital acting as the protocols’ appointed collateral agent. According to Chainlink, the combination means institutions no longer have to choose between holding assets with a qualified custodian and accessing DeFi lending markets.
