🔐 Borrow without selling your bitcoin… and without entrusting it to a custodian? That’s what Babylon is proposing to Aave.
📌 The facts (Aave forum, Oct. 14, 2026)
• Babylon Labs submitted a proposal (ARFC): accept native BTC as collateral on Aave V4
• The BTC would remain locked in vaults on the Bitcoin blockchain, with no bridge or “wrapped” version
• First use case: borrow stablecoins against this BTC
• Aave DAO would receive the first $500,000 in eligible annual revenue
🧠 How it works
• You lock your BTC in a Bitcoin vault (Trustless Bitcoin Vaults)
• On Ethereum, a non-transferable accounting token represents this collateral: it can’t be traded and serves only as a “receipt”
• If your loan becomes too risky, a liquidator takes over the position and exchanges it for WBTC
Today, Aave already accepts BTC through WBTC or cbBTC, but a custodian holds the actual bitcoins: Babylon wants to eliminate that risk.
⚖️ The caveat
• Nothing is live: there’s no final vote yet, no loan ratios have been set, and there’s no date
• Next steps: a 3-day Snapshot vote (at least 320,000 AAVE votes in favor), followed by an on-chain vote
• No custodian doesn’t mean no risk: code bugs, price oracle issues, liquidation if BTC falls
👤 Kwame, a spare-parts dealer in Kumasi, keeps some BTC as a reserve. When he needs to restock, he often sells at the wrong time. Borrowing stablecoins against his BTC would save him from selling… but if BTC falls sharply, he could lose everything through liquidation. The rule: borrow a small amount and keep a buffer.
✅ Takeaway: the promise is a “native BTC” loan without an intermediary. For now, it’s a proposal, not a product.
Would you borrow against your BTC, or do you prefer never to touch it? 👇
$BTC $AAVE
Not financial advice. DYOR.
Sources: Aave governance forum (Babylon ARFC, Oct. 14, 2026), Cointelegraph and crypto.news (Oct. 15, 2026).
#Bitcoin #DeFi #Africa
📌 The facts (Aave forum, Oct. 14, 2026)
• Babylon Labs submitted a proposal (ARFC): accept native BTC as collateral on Aave V4
• The BTC would remain locked in vaults on the Bitcoin blockchain, with no bridge or “wrapped” version
• First use case: borrow stablecoins against this BTC
• Aave DAO would receive the first $500,000 in eligible annual revenue
🧠 How it works
• You lock your BTC in a Bitcoin vault (Trustless Bitcoin Vaults)
• On Ethereum, a non-transferable accounting token represents this collateral: it can’t be traded and serves only as a “receipt”
• If your loan becomes too risky, a liquidator takes over the position and exchanges it for WBTC
Today, Aave already accepts BTC through WBTC or cbBTC, but a custodian holds the actual bitcoins: Babylon wants to eliminate that risk.
⚖️ The caveat
• Nothing is live: there’s no final vote yet, no loan ratios have been set, and there’s no date
• Next steps: a 3-day Snapshot vote (at least 320,000 AAVE votes in favor), followed by an on-chain vote
• No custodian doesn’t mean no risk: code bugs, price oracle issues, liquidation if BTC falls
👤 Kwame, a spare-parts dealer in Kumasi, keeps some BTC as a reserve. When he needs to restock, he often sells at the wrong time. Borrowing stablecoins against his BTC would save him from selling… but if BTC falls sharply, he could lose everything through liquidation. The rule: borrow a small amount and keep a buffer.
✅ Takeaway: the promise is a “native BTC” loan without an intermediary. For now, it’s a proposal, not a product.
Would you borrow against your BTC, or do you prefer never to touch it? 👇
$BTC $AAVE
Not financial advice. DYOR.
Sources: Aave governance forum (Babylon ARFC, Oct. 14, 2026), Cointelegraph and crypto.news (Oct. 15, 2026).
#Bitcoin #DeFi #Africa