1 week ago
Aave DAO has received a connection to integrate Coinbase’s upcoming Bitcoin wrapper, cbBTC, into its V3 level connected the Ethereum mainnet and Base.
In a Sept. 10 post, Aave’s founder, Stani Kulechov, explained that the connection aimed to presumption Aave arsenic the preferred level for launching Tier-1 assets.
Proposal details
The connection seeks to grow the options for Bitcoin holders participating successful DeFi connected Aave V3. By adding cbBTC, users would summation much choices for leveraging their Bitcoin, which could boost liquidity and engagement.
It noted that the integration of cbBTC aligns with Aave’s strategy to connection high-quality assets. It allows users to entree Coinbase’s liquidity portion benefiting from Aave’s established lending and borrowing features.
The connection stated that the synergy betwixt a large centralized speech and a starring DeFi level could pull mainstream users and thrust the platform’s growth.
In addition, the connection besides highlighted concerns surrounding Wrapped Bitcoin (WBTC) owed to its relation with TRON laminitis Justin Sun. It stated:
“With the ongoing changes with WBTC it is pertinent to person alternate wrapped BTC tokens for usage connected Aave. With Coinbase arsenic the issuer and custodian, their estimation volition apt marque this a trustworthy alternate to WBTC.”
The connection concluded that portion cbBTC whitethorn instrumentality marketplace stock from WBTC, it provides a invaluable alternate that could heighten BTC adoption connected Aave.
Concerns raised
Meanwhile, an Aave user, Midapple, expressed concerns that the connection to onboard cbBTC “seems premature, fixed that the plus is not yet live.”
The idiosyncratic highlighted respective unanswered questions, including minting mechanisms, liquidity concerns, and impervious of reserves.
Midapple besides flagged imaginable regulatory risks, noting that Coinbase could look challenges that mightiness impact cbBTC. Additionally, the idiosyncratic raised concerns astir custodial risks, pointing retired that if cbBTC relies heavy connected Coinbase, it could airs a azygous constituent of failure.
They concluded:
“It seems that the modular vetting process has been sidestepped entirely, and cbBTC is receiving peculiar attraction that different assets person not been afforded. This sets a unsafe precedent and raises questions astir the integrity of our decision-making process.”
The station Aave’s bid to integrate Coinbase’s cbBTC sparks assemblage concerns appeared archetypal connected CryptoSlate.
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