Aave Proposal Moves To Add Circle Wrapped Bitcoin As Collateral
Aave Labs has opened a governance proposal to add Circle Wrapped Bitcoin (cirBTC) as collateral on Aave V3 Core and Aave V4 Core on Ethereum. cirBTC launched on Ethereum mainnet on June 8 and is described as a 1:1 BTC-backed ERC-20 issued by a regulated Circle entity, with reserves segregated from corporate assets. The proposal is at the ARFC review stage, so it is not yet a listing. It would still need community support, a Snapshot vote, and a formal Aave Improvement Proposal before implementation. Aave Labs says it has no financial relationship with Circle and is not being compensated. If approved, cirBTC would expand Bitcoin-backed borrowing and collateral options inside Aave, while adding another institutional Bitcoin wrapper to DeFi. Governance discussion is expected to focus on reserves, redemption, liquidity, oracle support, counterparty risk, and risk parameters such as caps and liquidation thresholds.
