Aave Labs has submitted a governance proposal to establish Aave Institutional, an off-chain over-collateralized lending business that advances USDC or USDT to institutional borrowers against BTC and ETH held at qualified custodians. The DAO is asked to approve two parallel funding mechanisms: a new GHO facilitator with a 25M GHO bucket and use of DAO balance sheet assets to borrow up to $25M in stablecoins, with the mix shifting toward GHO as capacity grows. Rates are described as materially above on-chain yields.
This is a direct competitive development for Armada's crypto-repo desk. Aave Institutional targets the same institutional borrower profile, uses the same collateral types, and employs qualified custodians, closely mirroring Armada's structure. Armada should monitor the approved LTV ratios, rate levels, and custodian choices disclosed as the proposal progresses through governance, and use them as a live benchmark for its own pricing and collateral policy.