TIP-088: Aave 🤝 Threshold

Proposals
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Today, tBTC was listed on Aave, the leading lending platform across DeFi.

Aave on DeFiLlama

… as well as the largest single venue for lending WBTC — making Aave the largest decentralized BTC lending platform in production.

Top WBTC holders on Ethereum
Top WBTC holders on Ethereum971Ă—206 22.9 KB

Today’s listing of tBTC is a huge milestone on our 5-year journey to bring scaleable, decentralized Bitcoin access to DeFi at large.

Deepening our relationship

A strong relationship between lending platforms and major asset teams is vital.

The recent changes in WBTC came as a surprise to many of us in the space, and the subsequent fallout highlights the importance of that relationship.

To deepen our relationship, I propose we bring Aave directly into governance and network validation, further decentralizing the signer set, and ensuring the largest BTC lending platform has a say in future Threshold network upgrades.

Delegating T to Aave

Delegating 40M T to an operator running a node on behalf of the Aave DAO will ensure the Aave community stays involved in the technical details of validating tBTC, as well as allow Aave to begin building a T treasury position from staking rewards.

The Aave Chan Initiative (ACI) has been active and successful as a tBTC minter since early 2023, and is well positioned to take on this role. If they accept, I’d propose that after operating on mainnet without issue for 90 days, they be added to the Beta Staker Program.

Expanding the Threshold Council and nominating Aave to a seat

To date, the Threshold Council has been connective tissue between on-chain Governor Bravo votes and the Threshold Foundation. Good governance means minimizing our reliance on multi-sigs, and that’s exactly what we’ve done, reserving the Council for situations that are difficult or expensive to achieve via on-chain voting.

The Council also quietly holds another important role: the ability to veto malicious Governor Bravo proposals, preventing a takeover of the DAO governing tBTC.

I nominate Aave to join us in ensuring tBTC’s safe governance — by joining an expanded Threshold Council with a permanent seat.

Summary

We’ve been given an unprecedented opportunity to bring decentralized finance to Bitcoin. I believe fully embracing our partners and bringing them into our operations will further distinguish us from centralized alternatives, showing that we’re safer, faster, and more transparent.

Let’s grow together!

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1000% - I’d love to have them as a Beta Staker after a trial period and having Aave on Threshold Council makes sense.

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Good idea, I support this. Are there other projects we’d be interested in repeating this with? What would the criteria be for them losing their council seat?

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Thanks, @mhluongo. I strongly support this TIP.

I agree that the Aave listing is a major milestone, and we’ve seen keep anticipation expressed in Threshold Discord.

As awareness of and interest in tBTC as the leading decentralized alternative to custodied wrapped Bitcoin like WBTC and now cbBTC grows, it makes sense that key stakeholders in major DeFi protocols will want to not only support tBTC but take an active role in securing and governing the protocol.

Let’s welcome ACI as an operator, eventual beta staker and Council member.

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Sounds like a great way to grow the Threshold community.

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Just to expand on my original comment (and copy some stuff over from discord):

  • is there already a formal process for adding/removing council seats?
  • are there different “types” of council seats? eg individuals/DAO’s/other organisations. In the case of ACI, I’m assuming one person would represent them on the council, but obviously it needs to be possible for that person to change.

The UK has a lot of good material for helping to run charities. There are many parallels that can be drawn with DAO’s. This page might be of use https://assets.publishing.service.gov.uk/media/65c644f59c5b7f0012951c47/Association_CIO_model_090224.pdf - Section 9 Members

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With Aave having a permanent seat on the Threshold Council we ensure strong collaboration decentralized governance and set tBTC’s place as the leading permissionless Bitcoin bridge. :bridge_at_night: I urge T community to embrace this partnership and help build a stronger more resilient future for decentralized Bitcoin lending. :rocket: I’m all in for TIP-088! :100:

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There isn’t — and I believe the Council would have to agree to seats being added and removed. The rationale there was that we don’t want GovernorBravo to be able to directly tamper with the council makeup.

There aren’t, but I do think it would make sense to differentiate between seat types. I’m working on a follow-up proposal now that should also be taken into account… once it’s live maybe we can “refactor” the proposals to do it in one cohesive structure.

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