Aave Labs has opened an Aave Request for Comment, or ARFC, proposing a separate Hub-and-Spoke market on Aave V4 for institutions that want to borrow stablecoins against assets held with Anchorage. Under the design, the collateral would remain with the custodian rather than moving into Aave or Chainlink. Chainlink CustodySync would mirror custody balances on-chain and mint a non-transferable collateral receipt token known as CoCT, short for Custodied Collateral Token. Borrowing, repayment and liquidation would run through dedicated contracts built for this market structure. In liquidation, the custodian would sell the collateral off-chain first and then settle the debt on-chain. The proposal says the setup would not affect Aave’s existing markets or reserves. The first planned asset is a CoCT backed by custodied Bitcoin. Risk parameters, capacity limits and interest rates have not been set yet and still need review by risk service providers. The proposal would also need Snapshot approval and later on-chain governance approval before any deployment can take place.
Aave Labs has opened an Aave Request for Comment, or ARFC, proposing a separate segregated Hub-and-Spoke market on Aave V4 for institutions to borrow stablecoins against assets held in custody with Anchorage.
Under the proposal, the collateral would stay with the custodian throughout the process and would not move into Aave or Chainlink. Chainlink CustodySync would sync the custody balance on-chain and mint a non-transferable collateral receipt token called CoCT, or Custodied Collateral Token. Borrowing, repayment and liquidation would be handled through dedicated contracts.
For liquidations, the custodian would dispose of the collateral off-chain first and then settle the debt on-chain. The proposal says the structure would not affect Aave’s existing markets or reserves.
The first planned listing is a CoCT backed by custodied Bitcoin. Risk parameters, capacity and interest rates are still subject to assessment by risk service providers, and the market could only be deployed after Snapshot approval and subsequent on-chain governance approval.
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