Aave Labs Proposes Integration of Institutional Custody Assets

Aave Labs has proposed deploying a new V4 Isolated Hub interface to integrate institutional custody assets as collateral for stablecoin lending. The proposal, published on September 14 in the Aave Governance Forum, aims to bring custodial assets into the platform through Anchorage's hosting services.

Under the plan, institutions will store their assets with Anchorage and maintain custody during the loan period. Custody balances will be represented by non-transferable CoCT tokens on-chain, designed by Chainlink's CustodySync.

The CoCT token will only be transferable between the Hub, Spoke, and CustodySync, with each borrower position corresponding to a specific contract. The initial plan is to launch a CoCT for BTC stored at Anchorage, worth $75,647.00 as of live prices.