Mining-as-a-service company Blockware has proposed that the DeFi protocol Aave would create a Bitcoin treasury by mining Bitcoin. In a temperature control proposal submitted to the Aave DAO, the company offers to partner with the DeFi protocol to mine BTC.
According to the proposal, Aave, which has emerged as a leading DeFi protocol in terms of total value locked (TVL), could benefit immensely 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 greater adoption.
Gamble wrote:
“This is not just another treasury strategy – it is an untapped opportunity that not only strengthens the protocol’s balance sheet, but also opens the door to significant capital gains tax write-off strategies.”
The proposal also noted that Bitcoin mining as a strategy would benefit the Aave-issued decentralized stablecoin GHO. GHO, which launched in 2023, has struggled to compete with more established stablecoins like USDT and USDC.
The Blockware Proposal believes that BTC mining could drive GHO adoption. The strategy is expected to enable the integration of the Aave protocol into the Bitcoin network, expanding its reach and bringing more market attention to the platform.
Blockware wants to offer white glove mining service to Aave
A key 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 support Aave’s mining efforts at no additional cost.
Gamble explained that Blockware has economies of scale for its mining services, and the DeFi platform can leverage this to purchase Bitcoin mining machines at a significant discount while Blockware hosts them. He added that this strategy offers multiple benefits to the platform as they get their own discounted mining hardware that will appreciate over time, grow their coffers and generate positive publicity.
Interestingly, the mining expert noted that this is the best time to make such a move due to the current phase of the mining cycle. According to him, the costs of purchasing platforms are currently low and there is an increasing willingness among institutions to adopt BTC.
Aave DAO member questions the profitability of mining
Although the proposal is still in the ‘Temp Check’ phase, where the proponent determines whether there is sufficient interest from the community, there are already some opponents. One member of the Aave DAO disagreed with Gamble’s forecasts, noting that Bitcoin mining is not as profitable as the proposal makes it out to be.
They noted that several publicly traded Bitcoin miners are unprofitable on a cash basis, adding that the proposal does not take into account several other costs, including the acquisition and hosting of the miners.
In response, Gamble noted that publicly traded miners tend to have more overhead costs, which is why they are not as profitable. He added that Blockware customers are producing BTC for 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, wrote: “The ACI strongly opposes this proposal.” ACI is one of the key delegates responsible for decision-making on Aave, and its opposition increases the chance that the proposal will not progress past the initial stages.
Nevertheless, it is still a relatively new proposal that could be further discussed. Aave already has nearly $100 million in non-native assets in its treasury, including ETH, stablecoins and other cryptocurrencies. It remains to be seen whether home-mined BTC will join the list.
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