Mining-as-a-service firm Blockware has proposed that DeFi protocol Aave create a Bitcoin treasury by mining Bitcoin. In a temperature check proposal submitted to the Aave DAO, the firm is offering to partner with the DeFi protocol to mine BTC.
According to the proposal, Aave, which has grown to become a leading DeFi protocol in terms of total value locked (TVL), could benefit tremendously from mining. Blockware Head of Institutional Sales David Gamble explained that the successful lending platform could create a new revenue stream through Bitcoin mining, which would improve its balance sheet and position it for more adoption.
Gamble wrote:
“This isn’t just any treasury strategy—it’s an untapped opportunity that not only strengthens the protocol’s balance sheet but also opens the door to significant capital gains tax depreciation strategies.”
The proposal also noted that Bitcoin mining as a strategy would benefit Aave-issued decentralized stablecoin GHO. GHO, which launched in 2023, has struggled to compete with more established stablecoins such as USDT and USDC.
The Blockware proposal believes BTC mining could help GHO adoption rate. The strategy is expected to enable the integration of the Aave protocol into the Bitcoin network, expanding its reach and creating more market attention for the platform.
Blockware wants to offer white-glove mining service to Aave
A critical part of the proposal is the possibility of a partnership between Blockware Solutions and Aave. According to the proposal, Blockware has been offering mining services since 2017 and could aid Aave mining efforts without extra cost.
Gamble explained that Blockware has economies of scale for its mining services, and the DeFi platform can leverage this to acquire Bitcoin mining machines at a significant discount while Blockware hosts them. He added that this strategy offers multiple benefits for the platform as they get their own discounted mining hardware that will appreciate over time, grow their treasury, and generate positive publicity.
Interestingly, the mining expert noted that this is the best time to make such a move due to the current stage of the mining cycle. According to him, the cost of acquiring rigs is currently low, and there is an increasing appetite to acquire BTC among institutions.
Aave DAO member questions mining profitability
While the proposal is still in the “Temp Check” phase, where the proponent determines whether there is enough interest from the community, there are already some opponents. One member of the Aave DAO disagreed with Gamble’s projections, noting that Bitcoin mining is not as profitable as the proposal makes it.
They observed that several publicly traded Bitcoin miners are unprofitable on a cash basis, adding that the proposal fails to account for several other costs, including the acquisition and hosting of the miners.
In response, Gamble noted that publicly traded miners usually have more overhead costs, which is why they are not so profitable. He added that Blockware clients produce BTC at approximately $44,402.85, which represents a significant return on investment.
However, the influential DAO delegate, Aave Chan Initiative (ACI), is also against the proposal. Its founder, Marc Zeller, posted, “The ACI is strongly against this proposal.” ACI is one of the key delegates responsible for decision-making on Aave, and its opposition increases the odds that the proposal will not get past the initial phase.
Nevertheless, it is still a relatively new proposal that could be discussed further. Aave already holds close to $100 million worth of non-native assets in its treasury including ETH, stablecoins, and other cryptocurrencies. It remains to be seen whether its own mined BTC will join the list.
From Zero to Web3 Pro: Your 90-Day Career Launch Plan
