Aave voters on Nov. 9 advanced a plan to let Bitcoin (BTC) holders borrow through Aave V4 while their collateral stays on Bitcoin’s network, bringing the proposal closer to an onchain decision.
Babylon Labs said the offchain Snapshot ballot ended with 100% of votes in favor. The result moves the plan toward an Aave Improvement Proposal, which would need onchain approval before the lending market could open.
The proposed system would hold BTC in Babylon’s Trustless Bitcoin Vaults. Borrowers could access stablecoin loans through Aave without wrapping the asset or sending collateral across a bridge. Borrowers would bear interest costs and liquidation risk.
The governance proposal lists $21 million in initial stablecoin credit lines from Aave’s Core Hub and also calls for a separate Babylon Hub. Its proposed 78% collateral factor remains subject to final approval. The vote followed earlier community discussion and a risk review.
The proposal would direct the first $500,000 in qualifying annual revenue to Aave DAO. Revenue above that threshold would be split among Aave DAO, Babylon Foundation and an allocation for token purchases.
The next decision is an onchain vote on an Aave Improvement Proposal. Babylon Labs is targeting a limited mainnet rollout in late 2026 and says it will publish a staged rollout schedule in the coming weeks.
