Author: @ACI (Aave Chan Initiative)

Date: 2024-09-10

Summary

The proposal aims to onboard Coinbase’s cbBTC, to the Aave v3 protocol on Base.

Motivation

cbBTC, a new Bitcoin wrapper offering from Coinbase, is set to launch in the coming weeks. As a centralized and trusted entity in the cryptocurrency space, Coinbase’s entry into the wrapped Bitcoin market with cbBTC brings a unique value proposition to the Aave ecosystem.

This new asset will diversify the options available for Bitcoin holders looking to participate in DeFi activities on Aave v3. The introduction of cbBTC to Aave v3 will provide users with more choices for utilizing their Bitcoin holdings, increasing liquidity and engagement within the protocol.

Furthermore, cbBTC’s integration aligns with Aave’s commitment to offering a wide range of high-quality assets. It will enable users to tap into Coinbase’s liquidity and reputation while benefiting from Aave’s established lending and borrowing functionalities. This synergy between a major centralized exchange and a leading DeFi protocol could attract more mainstream users to Aave, contributing to the overall growth and adoption of the platform.

Benefits of listing cbBTC:

With the ongoing changes with WBTC it is pertinent to have alternative wrapped BTC tokens for use on Aave. With Coinbase as the issuer and custodian, their reputation will likely make this a trustworthy alternative to WBTC.

Market Impact

The addition of cbBTC may take marketshare from existing wrapped BTC assets including WBTC but as the purpose is to provide an alternative, this is not seen as negative. Overall, it is believed this will have slight positive impact on BTC asset adoption on Aave.

Chain to be deployed

This will be deployed on Base and ETH mainnet.

Proof of Liquidity and deposit commitments:

There will be $150,000 of incentives over 3 months from the Aave Merit program.

There are interested parties however, no concrete deposit commitments can be made until pool parameters have been set.

Useful links

https://governance.aave.com/t/temp-check-onboard-cbbtc-to-aave-v3-on-base/18805

Specification

Ticker: cbBTC

Contract address for both Mainnet and Base: 0xcbb7c0000ab88b473b1f5afd9ef808440eed33bf

Following the above analysis, we recommend listing cbETH on Aave V3’s Ethereum deployment. We recommend the following parameter settings:

Parameter	Value (Ethereum)	Value (Base)
Isolation Mode	No	No
Borrowable	Yes	Yes
Collateral Enabled	Yes	Yes
Supply Cap	450	200
Borrow Cap	45	20
Debt Ceiling	-	-
LTV	73%	73%
LT	78%	78%
Liquidation Bonus	7.5%	7.5%
Liquidation Protocol Fee	10.00%	10.00%
Variable Base	0%	0%
Variable Slope1	4%	4%
Variable Slope2	300%	300%
Uoptimal	45%	45%
Reserve Factor	20%	20%
Stable Borrowing	Disabled	Disabled
Flashloanable	Yes	Yes
Siloed Borrowing	No	No
Borrowable in Isolation	No	No
E-Mode Category	N/A	N/A

Disclaimer

The Aave Chan Initiative is not directly affiliated with Coinbase and did not receive compensation for creation of this proposal.

Next Steps

1. If the ARFC snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal

Copyright

Copyright and related rights waived under CC0.