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 submit, 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 decisions for leveraging their Bitcoin, which might enhance 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 said that the synergy between a significant centralized change and a number one DeFi platform might entice mainstream customers and drive the platform’s development.
As well as, the proposal additionally highlighted issues surrounding Wrapped Bitcoin (WBTC) resulting from its affiliation with TRON founder Justin Solar. It said:
“With the continuing adjustments with WBTC it’s pertinent to have various wrapped BTC tokens to be used on Aave. With Coinbase because the issuer and custodian, their status will possible make this a reliable various to WBTC.”
The proposal concluded that whereas cbBTC could take market share from WBTC, it supplies a precious various 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 reside.”
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 might face challenges which may have an effect on cbBTC. Moreover, the consumer raised issues about custodial dangers, mentioning that if cbBTC depends closely on Coinbase, it might pose a single level of failure.
They concluded:
“Plainly the usual vetting course of has been sidestepped totally, and cbBTC is receiving particular therapy that different property haven’t been afforded. This units a harmful precedent and raises questions in regards to the integrity of our decision-making course of.”
