Aave DAO Faces Vote on Native BTC Collateral as Babylon Labs Files Temp Check
Summary
Babylon Labs submitted a Temperature Check to Aave DAO proposing to integrate Trustless Bitcoin Vaults with Aave V4 to onboard native BTC as collateral without bridges, wrappers, or custodians. The plan would deploy two Aave V4 Spokes: a Babylon Core Lending Spoke to let BTC holders borrow against native BTC and a BTC Vault Swap Spoke to convert seized BTC into WBTC for permissionless liquidators. The design uses Taproot UTXOs and one-to-one adapter tokens (vaultBTC) to represent vault records on Ethereum; multiple security audits and formal verification are underway. If community sentiment on the Temp Check is positive, the proposal moves to ARFC review and then an onchain AIP vote; early community response and key Aave contributors have reacted positively.
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