Paxos, a provider of blockchain infrastructure, has acquired Fordefi, a New York firm specializing in crypto wallet technology and custody services. This collaboration is set to enhance Paxos’s regulated custody offerings, integrating Fordefi’s innovative multi-party computation (MPC) wallet technology and decentralized finance (DeFi) frameworks into a unified platform. Institutions will benefit from the capabilities to issue stablecoins, tokenize assets, and streamline onchain activities combined into a single service.

Although specific financial details of the deal were not revealed, sources suggest its value exceeds $100 million. Founded in 2021, Fordefi stands out for developing some of the earliest business-focused MPC wallets tailored for DeFi applications, complete with governance functionalities for transaction authorization and signing.

Moving forward, Fordefi will continue operating independently while their technology will be gradually incorporated into Paxos’s expansive infrastructure. Paxos itself serves as a compliant blockchain service provider, catering to major clients like PayPal, Mastercard, and Interactive Brokers, and is licensed in the United States, Europe, and Singapore. It is responsible for issuing various stablecoins such as PYUSD (PayPal USD), USDP (Pax Dollar), PAXG (Pax Gold), and USDG (Global Dollar).

Broader Impacts on DeFi

Across the crypto sector, there is an increasing trend of integrating DeFi protocols into mainstream services, enabling users direct interaction with onchain lending and asset tokenization. Examples include Kraken’s collaboration with the DeFi Development Corp, and Coinbase integrating the Morpho lending protocol into its app, facilitating simplified lending processes for users.

As of now, DeFi protocols have reportedly locked in a total value of up to $116 billion. The ongoing developments are set to reshape the landscape of blockchain technologies and services.