Aave DAO has obtained a proposal to combine Coinbase's upcoming Bitcoin wrapper, cbBTC, into its V3 platform on Ethereum mainnet and Base.
In a September 10 publish, Aave founder Stani Kulechov defined that the proposal was meant to place Aave as the popular platform for launching Tier-1 belongings.
Design particulars
The proposal seeks to increase the choices for Bitcoin holders taking part in DeFi on Aave V3. Including cbBTC would give customers extra choices to make use of their bitcoins, probably growing liquidity and engagement.
It famous that cbBTC integration is according to 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 acknowledged that synergy between a serious centralized trade and a number one DeFi platform might entice mainstream customers and drive the expansion of the platform.
As well as, the proposal additionally highlighted issues relating to Wrapped Bitcoin (WBTC) resulting from its affiliation with TRON founder Justin Solar. It acknowledged:
“With the continued modifications with WBTC, it’s handy to have different packaged BTC tokens to be used on Aave. Since Coinbase is the issuer and custodian, their popularity is prone to make it a reputable different to WBTC.
The proposal concluded that whereas cbBTC might take market share from WBTC, it offers a useful different that would enhance BTC adoption on Aave.
There have been issues
In the meantime, Aave person Midapple expressed concern that the proposal to incorporate cbBTC “appears untimely provided that the asset is just not but lively.”
The person 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 that would have an effect on cbBTC. As well as, the person expressed concern about jail dangers and identified that if cbBTC depends closely on Coinbase, this might signify a single level of failure.
They concluded:
“It seems that the usual vetting course of has been fully bypassed and cbBTC is receiving particular remedy not given to different belongings. This units a harmful precedent and raises questions concerning the integrity of our decision-making course of.”
