More on Dual-Layer Market

Helios couples a permission-less “public pool” with an opt-in, KYC-gated track that mirrors the architecture of Aave Arc yet preserves Bitcoin-native self-custody. Retail users keep the pure DeFi experience, while regulated desks can route size into segregated pools that enforce AML / sanctions controls at the smart-contract layer. The two rails share the same code-base and oracle feeds, so liquidity can migrate as compliance needs evolve—giving Helios breadth without fragmenting depth.

1 Dual-Layer Market Structure

Layer
Who can use it?
Key traits
Typical use-case

Permission-less Core

Any BTC wallet

No identity checks; open-source contracts; public mempool settlement

Retail borrowing, liquidation bots, algo-traders

Permissioned Pools

Whitelisted addresses only

On-chain KYC attestation required; separate interest-rate curves & risk limits

Hedge-fund leverage, treasury cash-management, RWA lenders

The split follows the precedent set by Aave Arc, which runs a KYC-only fork alongside the public market (Permissioned DeFi goes live with Aave Arc + Fireblocks, [Temp Check] Building Horizon's RWA Product: An Aave Licensed ...).

2 How the KYC Gate Works

  1. Credential issuance. A regulated “whitelister” (e.g., a custodian firms) signs an EIP-712 attestation binding a wallet to a legal entity that has passed AML/KYC checks. The signature is written to an on-chain registry. (Permissioned DeFi goes live with Aave Arc + Fireblocks)

  2. Pool-level check. When a user calls deposit(), borrow() or liquidate() on a permissioned pool, Helios validators first query the registry; no attestation → revert tx. (Knowledge Series Part 1: The AML/KYC Challenge in DeFi: Risk Mitigation Techniques)

  3. Revocation & updates. If a customer fails ongoing screening, the whitelister submits a revoke tx; the contract blocks new actions and flags existing positions for wind-down, aligning with FATF “travel rule” guidance. (Importance of anti-money laundering regulations among prosumers ...)

Because the logic sits inside the core contracts, a bank can even embed its own front-end that only exposes the permissioned pools to logged-in clients while still settling on the same L1 Bitcoin rails.

3 Governance & Risk Parameters

  • Separate supply/borrow caps, LTV bands and liquidation bonuses can be tuned for institutional risk appetite.

  • Institutional pools can list only regulator-blessed assets (e.g., BTC, USD stable-coins, tokenised Treasuries), limiting custody complexity.

  • All pools inherit Helios’ adaptive interest-rate model, but permissioned curves can be flatter to favour large-ticket borrowing (think 50 bp blocks instead of 500 bp jumps).

4 Operational Models for Institutions

  • Custodian-run gateway. A custodian runs a Helios validator and handles client onboarding—the same “Fireblocks-as-whitelister” pattern approved by Aave governance in 2025.

  • Prime-broker wrapper. A prime broker packages Helios liquidity behind its own API, furnishing trade reports that slot into banks’ regulatory reporting stacks (EU FICOD/EMIR 2025 updates emphasize consolidated risk reports).

5 Why a Dual Track Matters

6 Implementation Road-Map

Phase
What ships
Timeline

MVP

Launch core permission-less BTC pool; deploy KYC registry contract (empty)

Q3 2025

Pilot Pool

Partner custodian whitelists 3–5 hedge funds; max cap 500 BTC

Q3 2025

Scale-out

Add USD stable-coin pool, enable RWA collateral, integrate Chainalysis/TRM monitoring

Q4 2025

Bottom Line

Helios doesn’t force a choice between “wild-west” DeFi and closed-garden CeFi. Instead, it layers a cryptographically verifiable KYC gate on top of an unmodified Bitcoin-native lending engine. Institutions get the compliance assurances they need, retail retains full permission-less access, and both groups share the same transparent risk engine—creating a liquidity flywheel rather than a fragmented marketplace.

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