[AAVE] Add FBTC to Aave v3 Main Market on Ethereum

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.

https://app.aave.com/governance/v3/proposal/?proposalId=318