Aave Labs Proposes V4 Isolated Hub for Institutional Custodial Collateral

Aave Labs has submitted an ARFC to the Aave governance forum to deploy an Aave V4 Isolated Hub and Spoke system, enabling the use of institutional custodial collateral for stablecoin borrowing. Under this proposal, collateral remains with a custodian like Anchorage, while on-chain representation is managed via non-transferable Custody Collateral Tokens (CoCT) minted by Chainlink's CustodySync. The system allows borrowers to stake CoCT on a Spoke to draw stablecoins from the Isolated Hub, with liquidation and loan lifecycle events synchronized between the custodian and Aave via Chainlink infrastructure. The initial plan focuses on BTC held by Anchorage, with the proposal currently in the ARFC discussion phase before moving to Snapshot and AIP stages.