Aave Sets Sights on Bitcoin Liquidity

With a market capitalization of nearly $2 trillion, Bitcoin is undoubtedly the largest crypto asset by market cap. Still, for most core crypto natives, the true potential of this deep liquidity has yet to be unlocked due to the network’s limited programmability, which has, in turn, limited DeFi applications—or at least that has been the narrative until now.

output: Aave is eyeing a move to Bitcoin.

On Wednesday, leading Aave contributors submitted a proposal to gauge the community’s interest in launching the protocol on Spiderchain, an EVM-compatible Bitcoin Layer 2.

Aave contributors are looking to capitalize on the emerging narrative of decentralized finance (DeFi) on the OG blockchain.

Temperature Check Proposal

Aave-Chan Initiative (ACI), a group of core Aave contributors, submitted a temperature check proposal on Wednesday to gauge the community’s interest in launching Aave on Spiderchain.

The proposal argues that the move could benefit Aave in several ways, including by giving it an early mover advantage within the nascent Bitcoin DeFi space. Aave could also attract new users, such as Bitcoin whales, and expand the reach of its USD stablecoin GHO.

The proposal also highlights several benefits of Spiderchain, including its decentralized nature, performance, and built out DeFi ecosystem.

If the temperature check proposal to deploy on Spiderchain receives enough support, ACI will follow up with a more detailed proposal for the Aave community’s consideration.

So far, most community members appear to favor the move. One member joked that the proposal was “too bullish not to pass.”

Importance of the Matter

Aave is TVL’s largest DeFi lending protocol, and its interest in Spiderchain highlights the growing interest in Bitcoin’s nascent DeFi ecosystem.

ᴊᴏɪɴ ᴜs ᴏɴ ᴛᴇʟᴇɢʀᴀᴍ ᴀɴᴅ ɢᴇᴛ ᴀɪʀᴅʀᴏᴘ ᴀɴᴅ ᴘʀɪᴠᴀᴛᴇ ᴘʀᴇsᴀʟᴇ ᴀɴɴᴏᴜɴᴄᴇᴍᴇɴᴛs