Aave DAO passed an ARFC proposal on November 9 with 100% of votes in favor, enabling native Bitcoin as collateral on Aave V4 through Babylon Trustless Bitcoin Vaults (TBV). The integration allows Bitcoin holders to lock native BTC in a self-custodial manner and borrow assets such as USDT and USDC without wrapping, cross-chain bridges, or third-party custody arrangements.
Collateral factor and borrowing rates for native BTC will be comparable to wrapped assets like WBTC and cbBTC on the Aave V4 Core Spoke. Aave DAO will share related revenue with Babylon, with a portion allocated to buy back AAVE and BABY tokens. The next step is the final AIP stage to activate the integration on Ethereum mainnet.
Aave DAO Unanimously Approves Native Bitcoin Collateral via Babylon Integration
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