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 property.
Proposal particulars
The proposal seeks to develop the choices for Bitcoin holders taking part in DeFi on Aave V3. By including cbBTC, customers would acquire extra selections for leveraging their Bitcoin, which may increase liquidity and engagement.
It famous that the combination of cbBTC aligns with Aave’s technique to supply high-quality property. It permits customers to entry Coinbase’s liquidity whereas benefiting from Aave’s established lending and borrowing options.
The proposal acknowledged that the synergy between a significant centralized change and a number one DeFi platform may appeal to mainstream customers and drive the platform’s progress.
As well as, the proposal additionally highlighted considerations surrounding Wrapped Bitcoin (WBTC) because of its affiliation with TRON founder Justin Solar. It acknowledged:
“With the continued adjustments with WBTC it’s pertinent to have different wrapped BTC tokens to be used on Aave. With Coinbase because the issuer and custodian, their repute will doubtless make this a reliable different to WBTC.”
The proposal concluded that whereas cbBTC could take market share from WBTC, it offers a precious different that would improve BTC adoption on Aave.
Issues raised
In the meantime, an Aave consumer, Midapple, expressed considerations 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 considerations, 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 considerations about custodial dangers, stating that if cbBTC depends closely on Coinbase, it may pose a single level of failure.
They concluded:
“Evidently the usual vetting course of has been sidestepped solely, and cbBTC is receiving particular remedy that different property haven’t been afforded. This units a harmful precedent and raises questions concerning the integrity of our decision-making course of.”
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