Aave (AAVE) 13 percent below its weekly high, Babylon applies for native Bitcoin as collateral in V4: what matters now

The information provided in this article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry a high degree of risk. Always conduct your own research.Babylon Labs wants to bring native Bitcoin into Aave V4 as collateral, without wrapping and without a custodian. The first $500,000 of annual revenue goes entirely to the Aave DAO.Babylon Labs wants Aave V4 to accept real Bitcoin as collateral without that Bitcoin ever leaving the Bitcoin blockchain. The proposal has been in Aave's governance forum since Wednesday, October 14, 2026. Nothing has been decided: this is an ARFC, the stage before the vote. Holders of Aave therefore get a concrete template for the first time showing how much the protocol would earn from Bitcoin collateral. What Babylon has proposed for Aave V4 The proposal is titled “Onboard Native BTC as Collateral to Aave V4 via Babylon Trustless Bitcoin Vaults” and was filed by Babylon Labs. It was preceded by a temperature check, which the proposal passed. The first use case is named clearly: borrowing stablecoins against native Bitcoin. At Aave an ARFC is not a decision but a proposal with a rationale and a bluep...