Aave Labs Proposes Deploying V4 Isolated Hub to Integrate Custodial Collateral

Aave Labs published an ARFC on the Aave governance forum on September 14, seeking approval to deploy a new Aave V4 Isolated Hub and Spoke to integrate institutional custodial collateral for borrowing stablecoins. Institutional borrowers deposit collateral with Anchorage and maintain custody throughout the loan term, with custodial balances represented on-chain via the non-transferable Custodial Collateral Token (CoCT), minted and burned by Chainlink-designed CustodySync. Borrowers stake CoCT on the Spoke and withdraw stablecoins from the Isolated Hub. The full loan lifecycle, including liquidations, is synchronized between the custodian and Aave via Chainlink infrastructure. The proposal scope is limited to a single Isolated Hub and a single Spoke governed by the Aave DAO, with no changes to existing Hubs, Spokes, or reserves. Underlying assets never leave custody; Anchorage holds assets as custodian and acts as counterparty to the account control protocol, with Chainlink not holding assets. CoCT is a transfer-restricted ERC-20, permitted only for Hub, Spoke, and CustodySync, with minting and burning exclusive to CustodySync, and each borrower position corresponds to one contract. The initial plan is to launch one CoCT for Anchorage-custodied BTC. Next steps are ARFC discussion, followed by a Snapshot vote if supported, then a final AIP with parameters.