Aave proposes bitcoin-backed lending model in institutional custody
- —Bitcoin is not transferred into Aave but stays at Anchorage for the entire loan term
- —Collateral is represented by a non-transferable CoCT token issued via Chainlink CustodySync
- —The borrower could receive stablecoins from an isolated Aave V4 hub
- —The initiative is at the discussion stage in Aave governance
Why it matters: The model gives institutions access to on-chain liquidity without moving assets out of a regulated custodian, lowering the barrier for large capital entering DeFi.
Source: Bitcoinist