Aave Freezes New tBTC Supply and Borrowing After Mint-and-Redeem Pause

TL;DR: Aave contributors said the protocol had frozen additional tBTC supply and borrowing in its Ethereum Core market after Threshold’s temporary pause of the token’s mint-and-redeem functions. It would be misleading to conclude that tBTC has lost its Bitcoin backing solely because mint and redemption were paused. This case demonstrates why collateral quality is more complicated than an asset ticker. A wrapped token can track the price of Bitcoin under normal conditions yet carry an extra dependency on bridges, custodians and redemption operations. Lending protocols have to manage those risks separately from the volatility of the underlying coin.