governance

[ARFC] Onboard Native BTC as Collateral to Aave V4 via Babylon Trustless Bitcoin Vaults

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Babylon’s proposal would add native BTC as collateral on Aave V4 through Trustless Bitcoin Vaults, with two new modules named the Babylon Spoke and the BTC Vault Swap Spoke. It also sets native BTC as the only collateral asset in the Babylon Spoke, with borrowing stablecoins against BTC as the first use case, while a separate version says WBTC would be used for permissionless liquidations. Further governance votes and security review steps remain before launch, and one described revenue rule routes the first $500,000 in annual qualified revenue to Aave DAO.

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Key claims & sources

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The proposal asks for native BTC to be enabled as collateral on Aave V4 through Babylon Trustless Bitcoin Vaults, and it adds the Babylon Spoke and the BTC Vault Swap Spoke to the system.
[ARFC] Onboard Native BTC as Collateral to Aave V4 via Babylon Trustless…
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The Babylon Spoke is set out with native BTC as its only collateral asset, and its first use case is borrowing stablecoins against native BTC.
[ARFC] Onboard Native BTC as Collateral to Aave V4 via Babylon Trustless…
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One described version of the plan keeps collateral on Bitcoin while using WBTC to settle permissionless liquidations.
Babylon Advances Native Bitcoin Collateral Plan for Aave V4
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The proposal includes a revenue split that sends all of the first $500,000 in annual qualified revenue to Aave DAO.
Babylon Targets Aave V4 With Trustless Bitcoin Collateral
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Further governance votes and security review steps remain before launch.
Babylon advances native Bitcoin lending proposal on Aave V4

What it means

Aave users and BTC holders are the main group that would notice this next, because the proposal would let native Bitcoin sit in the Aave V4 setup as collateral and be used to borrow stablecoins. That changes what can be posted into the system today, while the described liquidation path still points to WBTC for permissionless liquidations in one version of the plan.

Market reaction i

BitcoinBTC it is the asset of the company or protocol in the event
first headline
-1.0% 2 h before
-1.4% 4 h after
$82,749price at publication
12data points

Coverage timeline

Every piece in order, with the time its news medium declares — if it is not believable we use ours and say so — and what it added to what was already known at that point. Arriving first is not the same as adding something.

first
Oct 14 14:26
+13 min
Oct 14 14:39
The Defiant context
Its angle: permissionless, settings, defiant
+18 min
Oct 14 14:43
Crypto Briefing context
Its angle: revolutionize, relinquishing, impacting
+6 h 13 m
Oct 14 20:39
Crypto Economy context
Its angle: collaboration, exclusively, babylonlabs
+18 h 48 m
Oct 15 09:14
Cointelegraph echo
No new facts: security, reviews, entered
+20 h 30 m
Oct 15 10:55
crypto.news echo
No new facts: proposes, allowing, wrapping

Has this happened before?

WhenWhat happenedFigure
31 days ago Aave Activates LlamaRisk Agents for Pendle Collateral on Plasma event 1 actors in common · 2 news media
31 days ago Aave Proposal Would Raise GHO Borrowing Rates as Reserves Run Low event 1 actors in common · 4 news media
34 days ago [ARFC] The Aave Foundation, Phase 1 event 1 actors in common · 6 news media
36 days ago [ARFC] Onboard OUSD to Aave V3 Core Instance and Aave V4 Core Hub event 1 actors in common · 2 news media
37 days ago How Chainlink Powers DeFi: Aave, Lido, and Other Leading DeFi Protocols Article 15 mins event 1 actors in common · 2 news media