Earlier today, we submitted an ARFC to the @aave governance forum detailing a plan to integrate native Bitcoin into Aave V4 as a collateral option. This functionality would be powered by Babylon Trustless Bitcoin Vaults (TBV).
The structural framework of our proposal introduces two novel Aave V4 Spokes, specifically the BTCVault Swap Spoke and the Babylon Spoke. Together, these components are designed to facilitate liquidation settlement and borrowing processes. Furthermore, the document lays out terms for revenue sharing alongside buybacks for BABY and AAVE.
Should this initiative be approved and implemented, owners of Bitcoin will gain the ability to lock their native BTC directly on the Bitcoin network. By doing so, they can utilize those holdings to secure loans against supported assets within Aave V4. Most notably, users can achieve this seamlessly without ever needing to wrap, bridge, engage in tri-party escrow, or hand over their Bitcoin to external third parties.
Appropriate risk parameters covering both Spokes are set to be determined and supplied by Aave's risk service providers. Please note that this entire initiative remains subject to Aave governance review and approval.
https://governance.aave.com/t/arfc-onboard-native-btc-as-collateral-to-aave-v4-via-babylon-trustless-bitcoin-vaults/25845
The structural framework of our proposal introduces two novel Aave V4 Spokes, specifically the BTCVault Swap Spoke and the Babylon Spoke. Together, these components are designed to facilitate liquidation settlement and borrowing processes. Furthermore, the document lays out terms for revenue sharing alongside buybacks for BABY and AAVE.
Should this initiative be approved and implemented, owners of Bitcoin will gain the ability to lock their native BTC directly on the Bitcoin network. By doing so, they can utilize those holdings to secure loans against supported assets within Aave V4. Most notably, users can achieve this seamlessly without ever needing to wrap, bridge, engage in tri-party escrow, or hand over their Bitcoin to external third parties.
Appropriate risk parameters covering both Spokes are set to be determined and supplied by Aave's risk service providers. Please note that this entire initiative remains subject to Aave governance review and approval.
https://governance.aave.com/t/arfc-onboard-native-btc-as-collateral-to-aave-v4-via-babylon-trustless-bitcoin-vaults/25845