Babylon didn't ask Aave governance for 1 spoke, it asked for 2. The Core Lending Spoke is where BTC collateral gets posted and loans get drawn. A second, separate one, the BTC Vault Swap Spoke, exists purely to handle what happens after a liquidation, settling those unwound positions in WBTC.
Splitting the design this way instead of running everything through a single spoke is its own decision with its own logic. Borrowing and liquidation settlement have genuinely different risk profiles, one is steady state activity, the other only fires under stress when speed and available liquidity matter most. Isolating them means a problem in the swap and settlement logic doesn't automatically compromise the core lending mechanics, and Aave's governance can set different caps and parameters for each.
The cost of that isolation is 2 attack surfaces and 2 governance objects instead of 1. 2 spokes to secure, 2 proposals to pass, 2 places for something to go wrong instead of a single unified system. Babylon chose isolation over simplicity, betting that containing risk in a crisis matters more than minimizing the number of moving parts before a crisis ever happens.
Babylon does isolate liquidation stress from everyday borrowing on purpose, the 2-spoke structure is a deliberate choice, not an accident of drafting. Babylon doesn't get that isolation for free, it means more components to individually secure and govern than 1 spoke would need.
@BabylonLabs_io #baby $BABY $COTI
Splitting the design this way instead of running everything through a single spoke is its own decision with its own logic. Borrowing and liquidation settlement have genuinely different risk profiles, one is steady state activity, the other only fires under stress when speed and available liquidity matter most. Isolating them means a problem in the swap and settlement logic doesn't automatically compromise the core lending mechanics, and Aave's governance can set different caps and parameters for each.
The cost of that isolation is 2 attack surfaces and 2 governance objects instead of 1. 2 spokes to secure, 2 proposals to pass, 2 places for something to go wrong instead of a single unified system. Babylon chose isolation over simplicity, betting that containing risk in a crisis matters more than minimizing the number of moving parts before a crisis ever happens.
Babylon does isolate liquidation stress from everyday borrowing on purpose, the 2-spoke structure is a deliberate choice, not an accident of drafting. Babylon doesn't get that isolation for free, it means more components to individually secure and govern than 1 spoke would need.
@BabylonLabs_io #baby $BABY $COTI