Add FBTC to Aave v3 Main Market on Ethereum
01Summary
Proposal to onboard Ignition's FBTC (a cross-chain Bitcoin protocol with $480M TVL) to Aave v3 Main Market on Ethereum, enabling Bitcoin holders to participate in DeFi with configured risk parameters including 73% LTV, 78% liquidation threshold, 200 FBTC supply cap, and 100 FBTC borrow cap. Chainlink oracle will provide pricing.
- Type
- protocol addition
Key changes
- FBTC asset listing on Aave v3 Main Market with borrowing and collateral functionality enabled(high)
- Supply cap of 200 FBTC and borrow cap of 100 FBTC established(high)
- LTV set at 73% and liquidation threshold at 78% for FBTC collateral(high)
- New eMode category created for FBTC/WBTC with 84% LTV and 86% LT for enhanced capital efficiency(medium)
- 50% reserve factor configured for protocol revenue generation(medium)
- Chainlink SVR BTC/USD oracle integrated for price feeds(high)
- Flashloan functionality enabled for FBTC(medium)
Notable concerns
- FBTC is a new bridged asset with Threshold Signature Scheme security model that requires careful monitoring
- Significant capital is being sourced from Ignition team's network with coordinated user incentives, suggesting concentrated initial liquidity
- 200 FBTC supply cap represents material value exposure that should be monitored for market conditions
- High liquidation parameters (7.5% bonus, 10% protocol fee) and 300% variable slope 2 rate indicate risk management for this new asset class
Generated by Kvorum
02Description
Simple Summary
The proposal aims to onboard Ignition’s FBTC, to the Aave v3 protocol Main Market on Ethereum.
Motivation
FBTC is a cross-chain BTC protocol that uses the Threshold Signature Scheme network to enable secure, decentralized Bitcoin scalability across multiple blockchains. By leveraging multi-party computation, FBTC strengthens bridge security, safeguarding user assets and ensuring robust cross-chain interoperability. This setup also integrates a cross-chain hub, allowing seamless BTC transfers while reducing issues linked to Bitcoin L2 growth.
This new asset will broaden opportunities for Bitcoin holders aiming to participate in DeFi on Aave v3. The introduction of FBTC offers users more flexibility in leveraging their Bitcoin, enhancing liquidity and driving increased engagement within the Aave protocol.
With $480M in total value locked (TVL), FBTC is emerging as a compelling solution in Bitcoin bridging, supported by its upcoming Chainlink Oracle integration to accelerate growth across EVM networks.
Aave is positioned to benefit from a material increase in AUM resulting from FBTC deposits. This capital is being sourced by from within the Ignition team’s network. Several sophisticated investors are looking to user Aave at size and some teams have built products specifical for investors in anticipationg of the Aave listing. The Ignition team is expected to provide incentives supporting Aave users directly and also strategy providers built on top of Aave. @TokenLogic has been coordinating with various prospective users to ensure there is adequate demand ahead of the listing.
Specification
Listing
The table below illustrates the configured risk parameters for FBTC
| Parameter | Value |
|---|---|
| Isolation Mode | false |
| Borrowable | ENABLED |
| Collateral Enabled | true |
| Supply Cap (FBTC) | 200 |
| Borrow Cap (FBTC) | 100 |
| Debt Ceiling | USD 0 |
| LTV | 73 % |
| LT | 78 % |
| Liquidation Bonus | 7.5 % |
| Liquidation Protocol Fee | 10 % |
| Reserve Factor | 50 % |
| Base Variable Borrow Rate | 0 % |
| Variable Slope 1 | 4 % |
| Variable Slope 2 | 300 % |
| Uoptimal | 45 % |
| Flashloanable | ENABLED |
| Siloed Borrowing | DISABLED |
| Borrowable in Isolation | DISABLED |
| Oracle | Chainlink SVR BTC/USD |
| Oracle latest answer | (2025-05-26) 109172.99000000 USD |
Additionally 0xac140648435d03f784879cd789130F22Ef588Fcd has been set as the emission admin for FBTC and the corresponding aToken.
Emode
The following emode will be created:
| Asset | FBTC | WBTC |
|---|---|---|
| Collateral | Yes | No |
| Borrowable | No | Yes |
| LTV | 84% | - |
| LT | 86% | - |
| Liquidation Bonus | 3.00% | - |
References
- Implementation: AaveV3Ethereum
- Tests: AaveV3Ethereum
- Snapshot
- Discussion
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
The decoded calldata consists of a single generic execute() call to a payload contract address, which is the standard pattern used by Aave governance proposals (Aave Governance V3 short executor delegatecalls into a purpose-built payload contract that contains the actual listing logic — asset onboarding, risk parameter configuration, eMode creation, and emission admin assignment). Because the decoded action set does not expose the granular sub-calls or parameters executed inside that payload contract, it is not possible to directly verify each numeric risk parameter, the eMode configuration, or the emission admin address against the calldata. However, this structure (one execute() call to a dedicated payload) is exactly what is expected for this type of proposal and does not itself contradict or omit anything claimed in the description. There is no evidence of a target mismatch, fund redirection, or unrelated action bundled in. Given the lack of granular decoded detail, confidence in a full parameter-level comparison is low, but nothing in the visible calldata conflicts with the description, so the assessment defaults to consistent with low confidence rather than flagging unverifiable specifics as discrepancies.,
Generated by Kvorum
04Actions
- Target
- 0x17ce…5992
- Value
- 0 wei
- Function
- fallback()
- Arguments
{}- Calldata
05Tally
Summed from votes
06Voters
| Voter | Choice | % of total | Rationale | ||
|---|---|---|---|---|---|
| 570x57ab…2922 | For | 279.7K | 47.83% | — | 2y ago |
| 2E0x2e21…f21a | For | 124.3K | 21.26% | — | 2y ago |
| EZezr3al.eth0x8659…7d0e | For | 53.9K | 9.22% | — | 2y ago |
| B90xb933…8dd1 | For | 39.6K | 6.77% | — | 2y ago |
| 870x8787…ea52 | For | 24.8K | 4.23% | — | 2y ago |
| EC0xecc2…6ac9 | For | 21.8K | 3.73% | — | 2y ago |
| 3D0x3ddc…05b0 | For | 20.1K | 3.43% | — | 2y ago |
| 8B0x8b37…2a22 | For | 10.9K | 1.87% | — | 2y ago |
| 2C0x2cc1…4df1 | For | 5.5K | 0.94% | — | 2y ago |
| 080x0865…24ce | For | 2K | 0.35% | — | 2y ago |
| AD0xad21…f892 | For | 803.1 | 0.14% | — | 2y ago |
| 620x6276…b4e8 | For | 603.9 | 0.10% | — | 2y ago |
| B30xb356…c826 | For | 480.3 | 0.08% | — | 1y ago |
| 180x18e2…023b | For | 147.6 | 0.03% | — | 2y ago |
| 6E0x6eed…91d3 | For | 114.3 | 0.02% | — | 2y ago |
| 7D0x7dcc…9fca | For | 22.5 | 0.00% | — | 2y ago |
| FE0xfefc…79fb | For | 9.7 | 0.00% | — | 1y ago |
| 8C0x8c6b…2b41 | For | 4.8 | 0.00% | — | 2y ago |
| 050x0579…4048 | For | 2.1 | 0.00% | — | 2y ago |
| 2F0x2f2f…f78a | For | 2 | 0.00% | — | 2y ago |
| C50xc554…7759 | For | 1 | 0.00% | — | 2y ago |
| 2E0x2e00…67fa | For | 1 | 0.00% | — | 2y ago |
| 010x019e…2ee3 | For | 0.3 | 0.00% | — | 2y ago |
| 0F0x0f0a…1b0d | For | 0.1 | 0.00% | — | 2y ago |
| F40xf404…9b14 | For | 0.1 | 0.00% | — | 2y ago |
| D70xd792…5e3e | For | 0 | 0.00% | — | 2y ago |
| E50xe5bd…7091 | For | 0 | 0.00% | — | 1y ago |
| CD0xcdaa…f2e5 | Against | 0 | 0.00% | — | 1y ago |
| E40xe408…738d | For | 0 | 0.00% | — | 2y ago |
07Forum
No forum thread is confidently linked to this proposal.
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