Aave Community Discusses WBTC Ban, Faces Resistance
CryptoNewsTerminal Staff20 Sep, 2024
Aave Community Discusses WBTC Ban, Faces Resistance
The Aave community is debating whether to ban Wrapped Bitcoin (WBTC) as collateral, with a proposal to set the loan-to-value (LTV) ratio for WBTC to 0%. However, Mark Zeller, founder of the Aave Chan Initiative (ACI), has expressed opposition to the proposal. Zeller argues that eliminating WBTC from Aave entirely would harm diversity and that protocols should support a variety of wrapped Bitcoins, including tBTC and cbBTC. He does, however, support reducing WBTC's supply cap. The discussion comes as several DeFi protocols, including Aave, explore reducing their exposure to WBTC due to centralization concerns stemming from Justin Sun's involvement in the Tron (TRX) ecosystem.
