In recent years, decentralized finance (DeFi) has moved beyond a niche experiment for blockchain enthusiasts to driving significant volumes at a global scale. Liquidity protocols, stablecoins, and tokenized assets have already demonstrated clear advantages in efficiency, transparency, and real-time settlement. However, for the traditional financial sector, one central question remains: how to harness these benefits without compromising security, governance, and regulatory compliance?

This is the discussion that frames the document “Institutional DeFi – Strategic Vision for Regulated Markets”, developed by Levery. The paper provides an in-depth analysis of how DeFi can be structured in an institutional, permissioned, and regulated model, balancing technological innovation with compliance standards and risk management frameworks.

Key topics covered

• Permissioned infrastructure models: how to design liquidity environments exclusive to verified participants, combining on-chain transparency with regulatory controls.

• Protocol-embedded compliance: mechanisms that make KYC, AML, and governance rules a deterministic part of transaction execution.

• Risk and liquidity management: frameworks to mitigate counterparty risk, protect liquidity providers, and ensure operational efficiency.

• Asset tokenization: opportunities to transform securities, derivatives, and financial instruments into regulated digital representations.

• Integration with stablecoins and CBDCs: how digital currencies can serve as foundational infrastructure for payments, settlement, and institutional liquidity.

• Institutional self-custody: models that strengthen operational security, eliminate reliance on centralized custodians, and reduce exposure to third-party risks.

In recent years, digital assets have gained prominence across global markets. Stablecoins now account for hundreds of billions of dollars in transaction volume, while regulators advance legal frameworks such as MiCA [1] in Europe and the GENIUS Act [2] in the United States. At the same time, central bank digital currency (CBDC) initiatives are accelerating the digitization of finance.

DeFi has introduced undeniable advantages: real-time atomic settlement, on-chain auditability, disintermediation, and reduced operational costs. These benefits have transformed how individuals participate in digital finance. Yet, for banks, asset managers, and fintechs, a key dilemma remains: how to harness these benefits without compromising regulatory compliance, security, and governance.

It is in this context that Levery was created, initially developed within Wireshape, Inc., a company specializing in blockchain solutions for regulated institutions. Wireshape is recognized for its applications integrating digital assets into regulated environments and for its contributions to CBDC development. From this environment of innovation, Levery has evolved into an independent infrastructure dedicated to institutional DeFi.

DeFi infrastructure designed for institutions

Unlike open DeFi, designed for unrestricted participation, Levery enables only verified participants, through KYC and KYB processes, to access liquidity and transact. This ensures the same efficiency, transparency, and atomic settlement of DeFi, but with the robustness required by regulators and institutional investors.

At its core, Levery consists of a suite of smart contracts built to address the governance and compliance requirements of financial institutions. This architecture has undergone a security audit by Runtime Verification, a Chicago-based firm globally recognized for applying rigorous mathematical methods to validate critical systems, including protocols such as Ethereum, Uniswap, Lido, and Maker. The process involved formal verification and line-by-line code review, ensuring that access controls, fee calculation mechanisms, and external dependencies operate with precision and verifiability. This level of scrutiny underscores Levery’s commitment to delivering a secure, transparent, and validated infrastructure for regulated environments.

What Levery offers

The infrastructure is built around a permissioned AMM mechanism, where every transaction is executed on-chain in accordance with deterministic compliance rules. Only verified and approved wallets can interact with liquidity pools. Institutions retain full control, defining through administrative roles who may provide liquidity or execute swaps. These permissions can be applied globally or tailored to individual pools, ensuring granular access control, stronger governance, and strict adherence to institutional policies.

The platform is delivered as a white-label solution, enabling regulated entities to launch fully branded exchanges while maintaining complete autonomy over policies, permissions, and operational workflows. To support this, Levery provides a comprehensive administrative console for wallet management, real-time monitoring, and the configuration of compliance and risk parameters.

Liquidity formation and management are designed with regulatory alignment in mind. Positions are represented by non-transferable ERC-721 tokens, permanently linked to verified entities. This approach simplifies reporting requirements and eliminates the possibility of unauthorized transfers. Integration with market price oracles enables dynamic fee adjustment, protecting liquidity providers while keeping pricing competitive for clients.

For seamless integration with banking and regulatory systems, Levery exposes secure, well-documented APIs that connect the protocol to compliance engines, reporting frameworks, and client-facing channels.

Finally, Levery adopts a secure self-custody model, ensuring that institutional clients retain direct control of their assets. Hardware wallets serve as the reference standard for private key custody, keeping keys permanently offline in tamper-resistant security chips. This architecture eliminates common attack vectors in hot wallets, such as malware, browser exploits, and credential leaks. For financial institutions, this model represents an essential layer of protection, substantially reducing counterparty risk and removing the need to assume the liabilities of third-party custody.

The scale of the opportunity

Despite already moving trillions of dollars in market value, the crypto economy still represents only a fraction of global potential. The World Economic Forum (WEF) estimates that more than USD 867 trillion in traditional assets, including derivatives, securities, and money-market instruments, could be transformed through tokenization [3]. This contrast shows that the true disruption is still ahead. For this capital to migrate securely to distributed ledgers, the existence of regulated, auditable, and institutionally aligned infrastructures is indispensable. This is the space that Levery occupies: enabling institutions to launch regulated platforms within weeks, reduce counterparty risks, ensure compliance by design, and unlock new revenue streams through tokenized assets and stablecoins.

Global support and alliances

Levery has received investment from the Uniswap Foundation through the Security Fund (UFSF), with the support of Areta, a Berlin-based digital asset advisory firm. The project is also accelerated by the Uniswap Foundation in partnership with the Atrium Academy, in a program focused on applied research and DeFi ecosystem development. This collaboration embeds Levery within the largest global DeFi ecosystem, which sets best practices in AMM security, governance, and efficiency, while providing access to cutting-edge tools and infrastructure.

In Brazil, Levery is financially supported by the Federal Government through the ILIADA project, funded by the Ministry of Science, Technology, and Innovation (MCTI) and led by the National Education and Research Network (RNP). This initiative strengthens Levery’s ties with the public and academic sectors to advance trustworthy and robust DeFi solutions for the Brazilian institutional market.

Levery was also selected as one of the top ten fintechs in the 2024 Santander acceleration program. Levery is a certified partner of Circle, the financial technology company behind USDC, the world’s leading regulated stablecoin. In addition, it is part of the Progmat Digital Asset Co-Creation Consortium (DCC) in Japan, which brings together banks, issuers, and technology providers to establish legal, operational, and technical standards for tokenized assets.

The future of institutional on-chain finance

Levery envisions a future where financial institutions operate in a borderless global market, instantaneous, with real-time settlement; secure, with deterministic governance and robust self-custody models; auditable, with transparent records available to regulators and investors; and regulated, with compliance embedded directly into the protocol’s logic. Beyond enabling this transformation, Levery provides institutions with the opportunity to lead this evolution, setting new standards of efficiency, security, and trust in the global financial ecosystem.

References

1. European Securities and Markets Authority. Markets in Crypto-Assets Regulation (MiCA). ESMA. Available at: https://www.esma.europa.eu/esmas-activities/digital-finance-and-innovation/markets-crypto-assets-regulation-mica. Accessed: 28 August 2025.

2. United States Congress. S.394 – GENIUS Act of 2025. 119th Congress, 2025–2026. Available at: https://www.congress.gov/bill/119th-congress/senate-bill/394/text. Accessed: 28 August 2025.

3. World Economic Forum. Digital Assets and Distributed Ledger Technology: Shaping the Future of Financial Infrastructure. Available at: https://www3.weforum.org/docs/WEF_Digital_Assets_Distributed_Ledger_Technology_2021.pdf. Accessed: 28 August 2025.