Aave DAO approved an ARFC proposal on November 9, 2026, to enable native Bitcoin as collateral on Aave V4 through Babylon Trustless Bitcoin Vaults (TBV), according to a Babylon post on X cited by PANews. The proposal received 100% support in the vote.
The approval was not the final activation step. According to the report, the integration would next proceed to the final AIP stage for activation on Ethereum mainnet.
Proposed Bitcoin collateral model
Under the proposed integration, Bitcoin holders would lock native BTC in a self-custodial arrangement and borrow assets such as USDT and USDC, without wrapping their Bitcoin or using cross-chain bridges or third-party custody protocols.
The integration’s collateral factors and borrowing rates would be comparable to those for wrapped assets such as WBTC and cbBTC on Aave V4 Core Spoke. Aave DAO and Babylon would share the related revenue, with a portion allocated to AAVE and BABY buybacks.
What the approval establishes
The reported vote advances a route for using native BTC as borrowing collateral without converting it into a wrapped asset. However, activation remained subject to the final AIP stage; the report did not provide a launch date.
Source: PANews original article, published November 9, 2026, at 23:41:55 (UTC+8).
