As reported by BitcoinWorld, Babylon and Aave have announced a partnership to enable the use of unwrapped Bitcoin as collateral in DeFi. This collaboration allows Bitcoin holders to use their native BTC directly for borrowing and lending without wrapping it into tokenized versions like WBTC. The technology involves locking BTC in time-locked contracts on the Bitcoin blockchain, which can then be used to secure activities on other chains. The partnership aims to reduce custodial risks and streamline the process for Bitcoin users to access DeFi liquidity. Additionally, Babylon plans to expand the framework into DeFi insurance, where users can deposit BTC into insurance pools to backstop protocols against hacks or failures. The feature is still in development, with no official launch date yet announced.
Babylon and Aave Enable Unwrapped Bitcoin Collateral in DeFi
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