Based on Coindesk, Babylon, a Bitcoin staking project, has partnered with Aave, the largest decentralized lending protocol, to allow native Bitcoin to be used directly as collateral without wrapping or centralized custody. The collaboration aims to integrate Babylon’s trustless vaults with Aave’s lending architecture, enabling users to deposit actual Bitcoin on its base chain and borrow stablecoins or other assets. Testing is expected to begin in early 2026, with a product launch planned for April 2026. Babylon also plans to expand its vault design into DeFi insurance, using BTC as collateral for protocol hack coverage, with this initiative expected to be announced by January 2026.
Babylon and Aave to Enable Native BTC Lending via Trustless Vaults in 2026
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