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Aave seeks $50 million to back BTC and ETH lending

Aave Labs said the proposal would use a DAO-managed funding pool to pay Aave V3 stablecoin borrowing rates, with margin-call risk applying to both the borrower and the funding position.

Reported · Written up by our desk · Market Structure

Aave is considering an institutional lending plan that would let borrowers post custodied Bitcoin or Ether collateral for dollar loans, while the Aave lending protocol’s governing DAO initially borrows those dollars using a separate pool of DAO crypto assets, according to CryptoSlate.

CryptoSlate reports that a September 30 clarification from Aave Labs identifies an Aave Labs entity as the contractual lender, and says the DAO-funded route would pay prevailing Aave V3 stablecoin borrowing rates.

The DAO is weighing two funding authorizations, including a 25 million issuance bucket for GHO and up to $25 million of borrowing in USDC or USDT against DAO assets, with the combined $50 million request covering lending against BTC and ETH, while the actual outstanding loan amounts remain undisclosed.

CryptoSlate added that Aave Labs described about $300 million of indicated demand as part of the plan, and that its scope includes a $20 million lead BT.

Latest closeBitcoin $83,709.88 ▲0.1%|Ethereum $2,683.00 ▲0.2%

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