Proposal: Add TBTC as collateral in AAVE V2

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The proposal to add TBTC as collateral for lending and borrowing on the AAVE protocol was discussed, with proponents highlighting TBTC's trustless, permissionless, and fully collateralized nature. Despite concerns about TBTC's maturity and potential risks, a community vote will ultimately decide its addition to the AAVE protocol.

The discussion primarily focused on the proposal to add TBTC (Bitcoin in Ethereum) as collateral for lending and borrowing on the AAVE protocol. The proposal was put forth by Ramaruro, Estebank, and Benlongstaff, who provided updates on TBTC's growth and addressed concerns raised in their previous proposal1. TBTC, developed by the Keep Network, is decentralized, trustless, permissionless, fully collateralized, and open source. It has been operating since September without any issues and is considered a safe and suitable addition for lenders and borrowers for the AAVE protocol1.

However, some community members expressed concerns about TBTC's maturity and potential risks. Peng_Fei suggested that TBTC needs more testing before being considered as collateral in the AAVE protocol2. Crew raised concerns about the volatility of the ETH/BTC price and the low liquidity of TBTC, suggesting that it might be riskier to list than other more liquid tokens5. In response, Benlongstaff explained that the goal of TBTC is redeemability, not a price peg to BTC, and that the ETH bond and KEEP stakes provide additional security7.

Despite these concerns, a poll was initiated to gauge community support for the listing, with Alterkahn voting in favor of the listing6. The discussion concluded with the understanding that TBTC's addition to the AAVE protocol would be determined by the community's vote. The TBTC system has demonstrated its reliability since its launch, with all custodial risks offloaded to the signers instead of the depositors, ensuring the safety of depositor funds1.

Posted 3 years ago

Last reply 3 years ago

Summary updated 2 months ago

Last updated 03/12 14:23