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<p><a href="https://x.com/Chainlink" rel="noopener noreferrer nofollow">@Chainlink</a> has launched CustodySync, a solution that allows eligible custodians to let institutional clients take part in DeFi lending while their assets stay in custody. <a href="https://x.com/Anchorage" rel="noopener noreferrer nofollow">@Anchorage</a> Digital, a federally chartered U.S. digital asset bank, is the official launch partner and first custodian.</p>
<h2 id="how-custodysync-works">How CustodySync works</h2>
<p>The system is designed to keep custody and lending infrastructure in step. <cite>It publishes custody balances on-chain via Chainlink Proof of Reserve and issues transfer-restricted receipt tokens that represent the custodied assets and serve as collateral in lending markets.</cite><cite>Custodians and lending protocols calculate loan-to-value (LTV) ratios from the same price data supplied by Chainlink Data Feeds and Data Streams.</cite><cite>If liquidation is triggered, a designated collateral agent executes the sale.</cite></p>
<p>Using a shared price source is meant to avoid situations where a custodian and a lending protocol value the same collateral differently. Mismatched valuations can lead to liquidations that happen too early or too late. <cite>According to The Defiant, Anchorage retains the collateral and manages margin and liquidation.</cite> The same report notes that <cite>details on the launch market remain unspecified.</cite></p>
<h2 id="the-market-opportunity">The market opportunity</h2>
<p><cite>Chainlink said digital asset custody currently amounts to about $700 billion, while the DeFi lending market holds more than $80 billion in deposits and over $30 billion in active loans.</cite> Much of the institutional capital held at regulated custodians has so far been unable to reach on-chain credit markets.</p>
<p>The launch follows a related proposal in the Aave ecosystem. <cite>Aave submitted a governance proposal for Custodied Collateral Lending on Aave V4, which would let institutions borrow stablecoins using assets held in custody at Anchorage.</cite><cite>That design uses Chainlink CustodySync and Price Feeds to bring custodied balances and pricing on-chain.</cite><cite>It would run in a separate Liquidity Hub, isolated from current markets.</cite></p>
<p>Custodied lending is not entirely new. <cite>Memeburn notes that Anchorage already supports structures involving Spark, Ethena and Kamino, where collateral stays under custody while institutions access crypto credit.</cite> CustodySync aims to standardise how custody data and pricing are shared with lending protocols, which could make it easier for other custodians and protocols to adopt similar setups.</p>
<h3 id="sources">Sources</h3>
<p><a href="https://thedefiant.io/converge/defi/chainlink-introduces-custodysync-with-anchorage-for-custodied-defi-borrowing" rel="noopener noreferrer nofollow">The Defiant: Chainlink Introduces CustodySync With Anchorage</a></p>
<p><a href="https://www.chaincatcher.com/en/article/2299062" rel="noopener noreferrer nofollow">ChainCatcher: Chainlink launches CustodySync solution</a></p>
<p><a href="https://memeburn.com/aave-is-turning-custody-into-a-new-credit-layer-for-defi/" rel="noopener noreferrer nofollow">Memeburn: Aave Is Turning Custody Into a New Credit Layer for DeFi</a></p>

Chainlink Just Gave Big Institutions a Safe Way Into DEFI Lending

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Other articles published on Oct 26, 2026

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