Aave published a governance proposal called Custodied Collateral Lending, built on Aave V4 and developed with US crypto-bank Anchorage and Chainlink. This system would allow financial institutions to borrow stablecoins on Aave while keeping their collateral assets with a regulated custodian such as Anchorage. The collateral would be represented on the blockchain by a non-transferable token called the Custodied Collateral Token, created using Chainlink’s CustodySync infrastructure. Liquidations would not occur automatically on a decentralized platform but would go through Anchorage, introducing an additional delay. This product would operate in a separate section of Aave V4 to isolate institutional risk from the rest of the protocol.
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