The supply of Wrapped Bitcoin (WBTC) on Aave has indeed reached a new all-time high. Despite some concerns about the security of WBTC's underlying Bitcoin custody, the supply of WBTC on Aave exceeded 37,000 in September, exceeding $2 billion at current prices. This growth came after BitGo announced that it would transfer WBTC product management to a new joint venture with BiT Global, a decision that raised market concerns that WBTC decentralized finance (DeFi) integration may need to be evaluated.
In addition, Aave community member LlamaRisk proposed a proposal to set stricter restrictions on WBTC to reduce potential risks. The proposal includes reducing the WBTC loan-to-value ratio (LTV) on all V3 instances to 0, as well as reducing the supply and borrowing caps to 5-10% above the current utilization rate.
Despite this, WBTC remains the most popular Bitcoin wrapped coin with a total value locked (TVL) of more than $9 billion. This shows that despite the concerns, market confidence in WBTC remains strong.
