Aave weighs USDG and native BTC as Acier allegations surface

The proposals are Global Dollar (USDG) for Aave V3 Arbitrum and Babylon Native BTC for Aave V4 Ethereum. The allegations involve Acier, a lending protocol founded by Marc Zeller and Ernesto Boado, both former core contributors to Aave.

The primary documents are the Aave Governance Forum posts covering the USDG assessment, the Babylon Native BTC assessment, and the Acier investor thread.

USDG is a fiat-backed, non-yield-bearing dollar stablecoin. Babylon Native BTC would let borrowers put up Bitcoin as collateral without a custodian, wrapper, or bridge, under a gated launch structure with delayed redemption.

USDG: caps, concentration and available liquidity

LlamaRisk supports adding USDG to Aave V3 Arbitrum as a borrowable asset with no collateral power. Proposed supply cap: 30 million USDG, with a 27 million borrow cap.

About 2.95 million USDG can be bought near par on Arbitrum, per the assessment. That liquidity sits in two pools — Fluid USDG/USDC at $5.03 million total value locked, Uniswap v4 USDG/USDC at $0.90 million. Using the assessment’s own breakdowns of 2.55 million USDG from Fluid and 0.45 million from Uniswap v4, Fluid accounts for 85% of the 3 million USDG available across both venues. For a liquidator trying to exit at scale, that concentration matters: most of the near-par capacity is in one place.

The Chainlink USDG/USD feed has stayed within 0.35% of $1 since August 2025, according to the assessment. On Arbitrum, USDG’s circulating supply is 33.24 million, which is 1.06% of its 3.13 billion total supply. The top 10 addresses hold 94.6% of the Arbitrum supply — a notable fact given that the proposed Aave supply cap is 30 million.

Paxos Digital Singapore issues USDG under MAS oversight; Paxos Issuance Europe issues it under MiCA. USDG is already listed on Aave V3 Ethereum Core, Ink, and X Layer, plus Aave V4 Ethereum. The Paxos bug bounty on Cantina covers USDG and its cross-chain bridging and offers up to 1 million USDG for critical findings.

Approval would give USDG suppliers another Arbitrum lending venue and borrowers a 27 million-unit debt ceiling. That comparison shows the proposed borrow cap is far above the currently observed near-par liquidity; the assessment does not establish how much liquidity would be available after listing.

Babylon Native BTC: collateral without a wrapper

LlamaRisk also supports onboarding native BTC as collateral on Aave V4. Aave’s total value locked is listed at $17.81 billion; Babylon’s is $3.31 billion, per TLT. Those figures come from TLT’s reporting, not from the governance assessment itself.

The collateral unit on Ethereum is a transfer-restricted ERC-20 used for internal accounting. Beneath that, the underlying unit is an indivisible BTC Vault — a non-fungible UTXO locked in a Taproot script on Bitcoin. Redemption is restricted to pre-committed actors and settles on Bitcoin over several days.

Timing is consequential. A peg-in takes about two hours; redemption takes about four days. Permissionless liquidations would settle through BTCVaultSwap, which pays the liquidator immediately in a supported token rather than making them wait through BTC redemption. The proposal presents this mechanism as what makes the collateral type workable in a lending market.

Each BTC Vault must contain at least 0.1 BTC and no more than 20 BTC. The protocol-wide collateral cap would start at 300 BTC, with a 200 BTC per-address cap at peg-in. Depositors at launch would be curated through a default-deny allow-list.

The contracts have not yet been deployed on Ethereum mainnet. Initial audits found several high- and critical-severity issues, all reported as resolved. Babylon maintains a $500,000 bug bounty on Sherlock, which is slated to cover the Aave integration contracts.

CoinGecko listed BTC at $80,218, down 1.6% over 24 hours, and ETH$2,345.55▼1.14% at $2,322.20, down 3.4%, as of October 24, 2026.

Acier thread puts former Aave ties under review

The Acier allegations come from a former ACI employee who also invested in the protocol. The thread targets Acier’s fundraising pitch deck, which presented ACI and BGD as its two core teams. Zeller clarified on October 1 that he owned one-third of Acier and BGD owned two-thirds. The thread also notes that the ACI team beyond Zeller previously included Togbe, Cris, Xavi, Martin, Nandy, and Alice — but only Zeller now remains. Mark Agranovski, who handles business development for Acier, uses a BGD email address.

Boado’s forum reply positioned the dispute as one involving Echo, the entity through which the investment was made. He wrote: “Once again, we have been communicating with Echo (including yesterday during /after discussing with you) on how to proceed with your replacing, and they compromised to come back to us as soon as possible. They are consulting (their legal and engineering team) on how to proceed. We have also told them that we can cover any additional cost on their side in order to make the process faster for you to be happy with the outcome. Now it seems that you are not really reasonable even with us telling you we are doing the best of our efforts on a situation that depends more on Echo (the entity you invested through) than on us and you have some type of ill intentions towards Acier, claiming very serious accusations like that we mislead our investors. Because of that, you should reach your contact on Echo ( Marc, and he can also connect you with the Echo team), and I will stop as of now any communication with you”

The investor’s claims remain allegations. The supplied documents do not resolve whether ACI still exists as a legal entity or clarify how responsibilities are divided between ACI and BGD.

The USDG and Babylon Native BTC proposals turn on concrete questions — caps, liquidity depth, custody mechanics, redemption timing, audit coverage. The Acier thread is a different kind of problem: a transparency dispute involving former Aave contributors and a fundraising structure whose ownership split Zeller clarified on October 1. They’re separate matters, but they’re sharing the same forum.