If this bull market was driven by institutions entering the space, then the next phase of large-scale institutional collateralized lending will usher in Institutional Bull 2.0. Now that BTC has been fully de-retailized, most of the coins are in the hands of institutions. However, BTC, as the highest-quality and largest-scale collateral, can no longer flow into DeFi to borrow USDT like before. Retail investors don’t have coins to operate with, and institutions holding BTC can’t operate like that either. This is mainly due to two regulatory restrictions: first, under the SEC's Investment Advisers Act, institutions are required to hold BTC in compliant custody, so they can’t directly operate with it themselves. Second, directly participating in public protocols like AAVE could easily trigger anti-money laundering sanctions, as the funds borrowed could potentially be tainted. For example, Spark has a large amount of USDC, and institutions have a large amount of BTC. One is on-chain, the other is off-chain. To collaborate, the gap in between must be bridged. Spark uses a CeDeFi model, integrating the first U.S.-regulated compliant custodian, @Anchorage, as the intermediary. Institutions deposit BTC into Anchorage for off-chain custody, and Anchorage generates a certificate that is uploaded on-chain. Spark’s smart contract reads this certificate and issues the loan. The most critical part, liquidation, is monitored and executed in real-time by Anchorage. This process merges on-chain and off-chain into a unified CeDeFi system. After Spark partnered with Anchorage, the first transaction used $222 million worth of BTC as collateral to borrow $150 million USDC. Currently, Spark’s standard APY is 4.98%, but Anchorage offers 6.5%. This shows that the interest rates institutions pay for borrowing are far higher than those for retail investors. For Spark, this means institutional borrowing demand directly brings in 30% more profit.