Aave Proposes Institutional Custodied Lending
Aave has submitted a governance proposal to introduce Custodied Collateral Lending built on Aave V4, letting institutions borrow stablecoins using assets held in custody at Anchorage. Announced in an official post on X, the design keeps the underlying collateral in Anchorages custody for the full loan term, while the custodian manages collateral, records balances and loan lifecycle events, and handles over-the-counter sales in the event of liquidation. How Custodied Collateral Lending Works The system uses Chainlink CustodySync to sync custodied balances on-chain in the form of non-transferable receipt tokens, while Chainlink Price Feeds provide consistent pricing data to Aave and the custodian to keep loan-to-value ratios synchronized. Borrowed stablecoins can be delivered directly to the borrowers address in a single transaction, streamlining the flow for institutional users. Receipt tokens let participants track exposure without moving the underlying assets, a structure aimed at satisfying the segregation and audit requirements that regulated institutions demand. A Standalone Liquidity Hub The new facility would operate within a standalone Liquidity Hub on Aave V4, isolated from the protocol‘s existing markets. That separation is intended to contain risk from the institutional product while letting it tap the same underlying infrastructure. Aave has been expanding its institutional footprint, joining a broader









