Babylon’s proposal to bring native Bitcoin collateral to Aave V4 has entered a new governance stage, but further votes and security reviews remain before launch.
Bitcoin-focused developer Babylon Labs has submitted a proposal to let users borrow stablecoins on Aave against native Bitcoin (BTC).
Under the hood, users would lock their BTC in vaults on the Bitcoin network and borrow against it on Aave. A non-transferable token on Ethereum would represent the collateral, while the BTC itself would remain on its native blockchain without being bridged or wrapped.
The Wednesday proposal follows an initial submission on May 25 and a preliminary community vote that passed on June 10, according to Babylon Labs.
