Babylon and Aave propose Bitcoin-backed DeFi lending without wrapped BTC
Key Questions
What are Babylon and Aave proposing for Bitcoin DeFi?
Babylon and Aave are proposing native Bitcoin collateral in DeFi through Aave V4's hub-and-spoke architecture without requiring wrapped BTC or bridges.
How would this integration affect Bitcoin liquidity?
If governance passes, the integration could unlock billions in dormant BTC for lending, advancing Bitcoin DeFi maturity in a trust-minimized way.
What version of Aave is targeted for the Bitcoin integration?
The proposal targets Aave V4, enabling users to borrow against native Bitcoin collateral directly without wrappers or additional bridges.
Babylon and Aave teaming up to bring native Bitcoin collateral into DeFi via Aave V4 Hub-and-Spoke architecture. No wrapped BTC or bridges needed. If governance passes, could unlock billions in dormant BTC liquidity. Trust-minimized infrastructure play for Bitcoin DeFi maturity.
Sources (2)
Updated May 26, 2026