Aave DAO has acquired a proposal to combine Coinbase’s upcoming Bitcoin wrapper, cbBTC, into its V3 platform on the Ethereum mainnet and Base.
In a Sept. 10 put up, Aave’s founder, Stani Kulechov, defined that the proposal aimed to place Aave as the popular platform for launching Tier-1 belongings.
Proposal particulars
The proposal seeks to develop the choices for Bitcoin holders collaborating in DeFi on Aave V3. By including cbBTC, customers would achieve extra decisions for leveraging their Bitcoin, which may enhance liquidity and engagement.
It famous that the mixing of cbBTC aligns with Aave’s technique to supply high-quality belongings. It permits customers to entry Coinbase’s liquidity whereas benefiting from Aave’s established lending and borrowing options.
The proposal said that the synergy between a serious centralized change and a number one DeFi platform may entice mainstream customers and drive the platform’s progress.
As well as, the proposal additionally highlighted issues surrounding Wrapped Bitcoin (WBTC) on account of its affiliation with TRON founder Justin Solar. It said:
“With the continuing modifications with WBTC it’s pertinent to have different wrapped BTC tokens to be used on Aave. With Coinbase because the issuer and custodian, their popularity will seemingly make this a reliable different to WBTC.”
The proposal concluded that whereas cbBTC might take market share from WBTC, it gives a worthwhile different that might improve BTC adoption on Aave.
Considerations raised
In the meantime, an Aave consumer, Midapple, expressed issues that the proposal to onboard cbBTC “appears untimely, on condition that the asset isn’t but stay.”
The consumer highlighted a number of unanswered questions, together with minting mechanisms, liquidity issues, and proof of reserves.
Midapple additionally flagged potential regulatory dangers, noting that Coinbase may face challenges that may have an effect on cbBTC. Moreover, the consumer raised issues about custodial dangers, stating that if cbBTC depends closely on Coinbase, it may pose a single level of failure.
They concluded:
“Plainly the usual vetting course of has been sidestepped fully, and cbBTC is receiving particular remedy that different belongings haven’t been afforded. This units a harmful precedent and raises questions in regards to the integrity of our decision-making course of.”
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