Babylon Moves Native Bitcoin Lending Proposal Toward Aave V4

Bitcoin -focused developer Babylon Labs has filed a new proposal with Aave DAO aimed at enabling users to borrow stablecoins on Aave using native BTC as collateral. The core idea is to avoid the common pattern of bridging or wrapping Bitcoin into Ethereum -compatible tokens, instead using Bitcoin vaults and a non-transferable Ethereum representation of the collateral. The initiative is currently still in Aave’s Request for Comment (ARFC) phase, where community members evaluate the risks and practicality of the integration.

Source: Crypto Breaking News