I have been involved with trading and running graph nodes for different coins since 2016. I currently have been experimenting with web3 and earning interest on my crypto thats just sitting in my wallet. Now I understand that the decentralized web runs on the ethreum networ but what I’m not able to wrap my head around is why can certain ERC-20 tokens be used as collateral . I understand anyone can create their own erc20 token hence they aren’t all reputable but tokens such as Graph is very evolved in the development of decentralized finance more importantly assisting numerous labs and programmers when it comes go developing dapps. Why can’t GRT be used as collateral on aave?
It just needs to be whitelisted. Please have a look at Creating an asset listing proposal, it explains the steps.