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[AAVE] Onboard tBTC to Aave v3 on Arbitrum

Voting ended 7 months agoSucceeded

Simple Summary

This proposal seeks to onboard tBTC to Aave v3 on Arbitrum following a successful launch on Mainnet

Motivation

tBTC is Threshold’s decentralized and permissionless bridge to bring BTC to Ethereum, Arbitrum and 6 other chains. Users wishing to utilize their Bitcoin on Ethereum & Arbitrum can use the tBTC decentralized bridge to deposit their Bitcoin into the system and get a minted tBTC token in their EVM wallet.

Threshold Network has brought native minting of tBTC to Arbitrum, is live on GMX and has strong, sticky liquidity to support liquidations.

Following its approval on AAVE V3 Ethereum, tBTC’s initial supply cap was reached within 72 hours, prompting an increase to meet the overwhelming demand and now sits at over 1,000 BTC TVL. This rapid adoption underscores the market’s appetite for trust-minimized BTC solutions in DeFi.

Benefits for Aave

High User Demand, since its initial deployment on Aave’s Ethereum market, tBTC reached its initial 500 BTC supply cap within the first week. The cap has been increased multiple times, now sitting at 2200 BTC, highlighting strong user interest. Something we hope to replicate on Arbitrum.
Easy, direct onboarding of BTC capital via Threshold’s Arbitrum native minting.
A range of lending options for those who wish to earn yield on their BTC.
Preferable yields on tBTC through active incentive participation, boosting Aave protocol use, fees and TVL.

Specification

The table below illustrates the configured risk parameters for tBTC

| Parameter | Value | |

| -: | | Isolation Mode | false | | Borrowable | DISABLED | | Collateral Enabled | true | | Supply Cap (tBTC) | 50 | | Borrow Cap (tBTC) | 25 | | Debt Ceiling | USD 0 | | LTV | 73 % | | LT | 78 % | | Liquidation Bonus | 7.5 % | | Liquidation Protocol Fee | 10 % | | Reserve Factor | 20 % | | 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 details

Additionally 0xac140648435d03f784879cd789130F22Ef588Fcd has been set as the emission admin for tBTC and the corresponding aToken.

References

Copyright

https://app.aave.com/governance/v3/proposal/?proposalId=360

Off-Chain Vote

YAE

62 HVAXVC82.7%

NAY

13 HVAXVC17.3%

Quorum:7500%

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Discussion

[AAVE] Onboard tBTC to Aave v3 on Arbitrum

Timeline

Aug 20, 2025Proposal created

Aug 21, 2025Proposal vote started

Aug 23, 2025Proposal vote ended

Mar 17, 2026Proposal updated

Motivation

Threshold Network has brought native minting of tBTC to Arbitrum, is live on GMX and has strong, sticky liquidity to support liquidations.

Benefits for Aave

High User Demand, since its initial deployment on Aave’s Ethereum market, tBTC reached its initial 500 BTC supply cap within the first week. The cap has been increased multiple times, now sitting at 2200 BTC, highlighting strong user interest. Something we hope to replicate on Arbitrum.

Easy, direct onboarding of BTC capital via Threshold’s Arbitrum native minting.

A range of lending options for those who wish to earn yield on their BTC.

Preferable yields on tBTC through active incentive participation, boosting Aave protocol use, fees and TVL.

Specification

The table below illustrates the configured risk parameters for tBTC

| Parameter | Value | |

| -: | | Isolation Mode | false | | Borrowable | DISABLED | | Collateral Enabled | true | | Supply Cap (tBTC) | 50 | | Borrow Cap (tBTC) | 25 | | Debt Ceiling | USD 0 | | LTV | 73 % | | LT | 78 % | | Liquidation Bonus | 7.5 % | | Liquidation Protocol Fee | 10 % | | Reserve Factor | 20 % | | 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 details

Additionally 0xac140648435d03f784879cd789130F22Ef588Fcd has been set as the emission admin for tBTC and the corresponding aToken.