Aave Labs Floats V4 Isolated Hub to Let Institutions Borrow Against Custodied Collateral

Aave Labs said it has posted an ARFC to the Aave Governance Forum dated Sept. 14, seeking approval to deploy a new Aave V4 Isolated Hub and Spoke aimed at enabling stablecoin borrowing backed by institutionally custodied collateral. Under the proposal, institutional borrowers would place collateral with Anchorage and keep custody for the duration of the loan. That custodied balance would be reflected onchain via nontransferable custodied collateral tokens (CoCT), which would be minted and burned by CustodySync, a Chainlink-designed system. Borrowers would stake CoCT on the Spoke and draw stablecoins from the Isolated Hub. Aave said the full loan lifecycle, including liquidations, would be kept in sync between Anchorage and Aave using Chainlink infrastructure. The design is scoped to one Isolated Hub and one Spoke governed by the Aave DAO, and would not alter existing Hubs, Spokes, or reserves. The underlying assets would remain with the custodian at all times. Anchorage would hold the assets and serve as the account control protocol counterparty, while Chainlink would not custody any assets. CoCT would be a restricted-transfer ERC20 token, with minting and burning limited to CustodySync, and one contract deployed per borrower position. The initial rollout would launch a CoCT for BTC held in custody at Anchorage. Next steps include discussion of the ARFC, a Snapshot vote if the proposal gains support, and submission of final parameters as an AIP.