Aave Labs Floats V4 "Isolated Hub" Proposal to Bring Custodied Collateral Onchain

Aave Labs has published an Aave Request for Comment (ARFC) on the Aave Governance Forum dated September 14, proposing deployment of a new Aave V4 Isolated Hub and Spoke designed to let institutional, custodied assets be used as collateral for stablecoin borrowing. Under the proposal, institutional borrowers would place collateral with Anchorage and retain custody for the duration of the loan. The custodied balance would be mirrored onchain via non-transferable Custodied Collateral Tokens (CoCT), minted and burned by CustodySync, a system built by Chainlink. Borrowers would stake CoCT on the Spoke and draw stablecoins from the Isolated Hub. Aave said the full loan lifecycle, including liquidations, would be synchronized between the custodian and Aave using Chainlink infrastructure. The design is scoped to a single Isolated Hub and a single Spoke governed by the Aave DAO, and would not modify any existing Hubs, Spokes, or reserves. The underlying assets would never leave custody: Anchorage would hold the assets and serve as the account control protocol counterparty, while Chainlink would not hold any assets. CoCT is described as a restricted-transfer ERC-20 token, with minting and burning limited to CustodySync; the proposal calls for one contract per borrower position. The initial rollout would launch a single CoCT representing BTC held in custody at Anchorage. Next steps include community discussion of the ARFC, a Snapshot vote if there is support, and submission of an Aave Improvement Proposal (AIP) with final parameters.