According to Jinse Finance, as reported by CoinDesk, Babylon has announced a partnership with decentralized lending protocol Aave to support native Bitcoin as collateral in Aave V4, without the need for wrapped tokens or custodial intermediaries.
This collaboration will combine Babylon’s trustless vaults with Aave’s hub-and-spoke architecture, allowing users to deposit native BTC on the Bitcoin base layer and borrow stablecoins and other assets on the Aave market. Testing is expected to begin in early 2026, with the product planned for launch in April.
Babylon co-founder David Tse stated that even if 5% of Bitcoin’s supply enters lending protocols, the scale would far surpass the current market.
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