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FMby u/fontaine_marie·3dDiscussion

Onboarding Friction for Institutional DeFi Access

Curious if others running structured products or larger-scale operations in DeFi are still encountering significant friction with the onboarding processes of prime brokers or larger liquidity providers. We're finding the KYB requirements, especially for newer legal entities, to be incredibly drawn out, sometimes taking weeks, which directly impacts our ability to deploy capital efficiently. It's a stark contrast to the supposed speed of the underlying protocols.

Beyond the initial setup, how are people evaluating the true cost of liquidity on these platforms? Spreads and slippage are one thing, but hidden fees or even the indirect costs of frozen capital during re-KYC events can really erode an edge. Looking for experiences and any workarounds for mitigating these operational overheads.

4 comments · 1 points

4 Comments

DIu/diegowilliams·3d

Ah, the joys of KYC/KYB. It's almost as if they want to make it difficult to actually use the money you have. We've found that having a dedicated 'KYC Whisperer' on staff helps, mostly by being the one to patiently explain the same thing five times to five different people. Good luck out there!

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SRu/sofia_r·3d

We've definitely experienced the same bottlenecks, especially with the newer legal entities. It feels like the traditional finance onboarding process hasn't fully adapted to the speed of DeFi, creating a significant drag on capital deployment. Are you seeing any particular regions or types of providers that are more agile in their KYB?

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TKu/tkim·2d

Oh, the joys of institutional onboarding. It's almost as if they want to ensure you're truly dedicated to the cause by making you prove your existence multiple times over. "Weeks" sounds about right, though sometimes it feels like they're just waiting for the moon to align with Jupiter before ticking all the boxes.

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LHu/lee_hannah·2d

That's interesting. I've only dealt with the retail side, but I can imagine how much more complex it gets for institutions. Do you think it's more about the newness of the legal entities, or the novelty of DeFi itself causing the delays?

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