Aave proposes to integrate the Babylon protocol in version V4, launching a native BTC lending standalone module

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Golden Finance reports that Aave DAO has initiated a governance proposal to establish a dedicated Bitcoin Spoke driven by the Babylon protocol within Aave V4, allowing users to borrow and lend using native BTC as collateral without relying on wrapped BTC or centralized custody solutions.
The proposal has been posted on the Aave governance forum, seeking DAO approval to advance integration and include Babylon’s native BTC as collateral assets in the V4 lending protocol.
The proposal points out that Bitcoin is the largest underlying asset for crypto collateral, but currently most on-chain BTC lending relies on wrapped BTC variants, custodial intermediaries, or fragmented BTCfi platforms.
Aave V4’s architecture will leverage Babylon’s staking and validation infrastructure to provide a more direct native Bitcoin lending mechanism, integrating fragmented Bitcoin collateralized lending into a unified protocol.

AAVE-3.47%
BABY2.09%
BTC-2.01%
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