News
Babylon Labs proposes native Bitcoin collateral for Aave V4 stablecoin loans
Babylon Labs has proposed a system that would allow users to borrow stablecoins on Aave V4 using native Bitcoin as collateral via Taproot vaults, eliminating the need for wrapped BTC. The design is currently under risk review, with proposed exit controls and an Emergency Guardian seat still unresolved. The proposal raises questions about liquidation mechanisms and governance. Implementation will require further risk analysis, community review, and approval by Aave governance before it can be deployed.