Investment
Features
FeesSafety
Academy
More
Pluang+

Babylon proposes native Bitcoin collateral for Aave V4, keeping BTC on Bitcoin network with liquidations in WBTC.

Protocol Fundamentals
14 Oct 2026
Crypto Briefing
View Source
Bullish
Babylon proposes native Bitcoin collateral for Aave V4, keeping BTC on Bitcoin network with liquidations in WBTC.

Babylon Labs is advancing a plan to enable borrowing on Aave V4 using Bitcoin that remains on the Bitcoin network, avoiding wrapped tokens. Their Trustless Bitcoin Vaults protocol locks BTC in self-custodial Taproot UTXOs, while Aave treats an internal token, vaultBTC, as collateral. Liquidations pay out in WBTC to keep the process smooth and permissionless. The proposal is still pending risk parameter settings and further Aave DAO votes before mainnet launch. This could attract BTC holders who want lending access without giving up custody, potentially activating idle WBTC liquidity on Aave.

Aave's native token trades at Rp2.793.940 on Pluang, down 2.07% in the last day, reflecting some market caution. Wrapped Bitcoin (WBTC), which plays a key role in Babylon's collateral plan, is priced at Rp1.462.582.051 with a 2.05% decline as of Oct 14, 2026 22:04 WIB.

More News (AAVE)

banner-footerbanner-footer

Invest & Trade with
#1 Award-Winning Investment Super App