3 payment rules control Aave’s native Bitcoin market, but only WBTC settles them
· price · Sentiment: neutral
Three payment rules dominate settlement flows in Aave’s native Bitcoin market, yet only WBTC is used to actually settle them. The other Bitcoin representations on the protocol remain sidelined from the core payment mechanics that govern lending, borrowing, and liquidation activity. This concentration highlights a structural reliance on a single wrapped Bitcoin asset, creating a potential single point of failure for the dominant DeFi venue for Bitcoin liquidity. The key implication is that any disruption to WBTC custody, liquidity, or governance would directly impair the functionality and risk management of Aave’s entire Bitcoin ecosystem.