Update
Aave Passes Bitcoin-Lending Proposal
Aave's proposal to allow users to borrow stablecoins against native Bitcoin passed an early governance vote on November 9, according to Babylon Labs. Final approval is pending. Babylon reported 100% support for the plan to connect its Trustless Bitcoin Vaults to Aave V4, with the next step being an Aave Improvement Proposal (AIP) for final on-chain approval. The proposal sets out initial stablecoin credit lines from Aave's Core Hub liquidity pool of $8 million each for USDT and USDC, $1 million for GHO, and $2 million each for USDG and RLUSD. A separate liquidity pool, the Babylon Hub, would let liquidity providers choose exposure to native Bitcoin collateral, with its own limits. Risk adviser LlamaRisk recommends a 78% collateral factor for native BTC. Babylon targets mainnet for late 2026, subject to change and confirmation.