Aave proposes cirBTC collateral onboarding for v3 Core

What happened

An Aave DAO proposal seeks to add Circle Wrapped Bitcoin, or cirBTC, as borrowable collateral in the Ethereum Aave v3 Core instance and separately in Aave V4 Core.

What changed

For Aave v3, the proposed configuration would enable borrowing and collateral use with a 250-unit supply cap, 20-unit borrow cap, 73% LTV, 78% liquidation threshold, 5% liquidation bonus, and Chainlink BTC/USD pricing.

What did not change

cirBTC has not been listed through an executed AIP. The proposal calls for technical and risk assessments and later on-chain enforcement before the v3 change becomes operative.

Confirmed

• The proposed Aave v3 market is Ethereum Core.
• The proposed v3 LTV is 73% and liquidation threshold is 78%.
• The proposed v3 supply cap is 250 cirBTC and borrow cap is 20 cirBTC.
• The proposal recommends Chainlink’s BTC/USD feed for pricing.
• The stated next steps include technical and risk assessments followed by an AIP for v3 enforcement.

Still open

• The final technical and risk assessments, including custody, reserve, redemption, liquidity, and oracle-basis risks.
• Whether the proposal receives governance approval and executes on-chain.
• Whether final parameters differ from those in the candidate record.
• The deployed reserve and oracle configuration if execution occurs.

What it means for an advisor

• Monitor the later AIP and execution record before treating cirBTC as Aave v3 collateral.
• If executed, review Circle custody and redemption controls, BTC/USD oracle basis risk, market liquidity, and the final cap configuration.
• The proposed 73% LTV is below Ketju’s greater-than-80% bridged or multi-wrap collateral trigger, so that specific kill criterion is not fired by the proposal.