Aave V4 plans to launch a segregated market for escrowed collateral, with initial support planned for Bitcoin as collateral.

BlockBeats news, September 16: Aave Labs has initiated an ARFC (Aave Request for Comment), proposing to deploy a separate isolated Hub-and-Spoke market on Aave V4, allowing institutions to borrow stablecoins using Anchorage-custodied assets as collateral. The collateral remains with the custodian throughout and does not enter Aave or Chainlink; Chainlink CustodySync will synchronize custody balances on-chain, minting non-transferable Custody Collateral Tokens (CoCT), with borrowing, repayment, and liquidation all executed through dedicated contracts. Liquidation involves the custodian disposing of collateral off-chain before settling the debt on-chain.

This proposal does not affect existing markets and reserves. The initial phase plans to launch CoCT (Custody Collateral Tokens) backed by custodied Bitcoin, with risk parameters, limits, and interest rates still pending evaluation by risk service providers and subject to approval via Snapshot and subsequent on-chain governance before deployment.