Aave Freezes New tBTC Supply and Borrowing After Mint-and-Redeem Pause
Summary
Aave froze new tBTC supply and borrowing in its Ethereum Core market on October 31 after Threshold temporarily paused tBTC minting and redemption. The restriction applies only to that asset and market; it does not halt unrelated Aave pools or itself establish that tBTC has lost its Bitcoin backing. Existing positions remain subject to normal health and liquidation rules, while repayment and collateral withdrawal remain available under those rules. The pause highlights the operational and liquidity risks that wrapped tokens add beyond Bitcoin price exposure. Users should monitor Threshold’s restoration timeline, tBTC liquidity and any Aave market-parameter changes.
