Aave Labs Proposes V4 Lending Model Using Anchorage-Custodied Bitcoin

Aave Labs has introduced a proposal for an Aave V4 "Isolated Hub & Spoke" model that allows institutions to borrow on-chain without moving their Bitcoin out of regulated custody. Under this plan, Bitcoin remains with Anchorage Digital Bank, while a non-transferable Custodied Collateral Token (CoCT) represents the position on-chain. Chainlink's CustodySync infrastructure would be utilized to synchronize custody data with Aave to manage lending and liquidation processes.