Aave’s Native Bitcoin Plan Moves Forward, But Governance Has Questions

TL;DR: Babylon Labs has advanced a proposal to bring native Bitcoin collateral to Aave V4 without requiring wrapped BTC or a central custodian. The plan still faces community review, risk analysis and governance votes.
Bitcoin could become collateral for Aave loans without first being handed to a custodian or converted into a freely traded wrapped token. That is the proposal Babylon Labs took to Aave’s governance forum on October 14, advancing a project that has been under discussion since