Aave Snapshot Backs Babylon’s Native Bitcoin Collateral for V4, but On-Chain Vote Remains

Aave DAO’s off-chain vote on letting native bitcoin serve as collateral on Aave V4 through Babylon’s Trustless Bitcoin Vaults has closed, and the result was reported as a pass. The Defiant had scheduled the Snapshot vote for November 6 to 9, and CoinDesk’s week-ahead column listed it as ending November 9. PANews, citing a post from Babylon on X, reported that the proposal passed with 100% of votes in favour. The pages reviewed did not include raw vote counts or turnout, and the result has not been confirmed on Snapshot itself here, so the figure should be treated as reported.

The vote does not turn the market on. The Defiant noted that activating it still requires a separate on-chain governance vote, and that LlamaRisk had suggested a 300 BTC collateral cap. Until that AIP passes, BTC cannot be used as collateral on Aave in this way.

Babylon’s original proposal, as covered by Bitcoin.com in May, would add two Spokes on Ethereum Mainnet, one for borrowing against native BTC and one for settling liquidations into WBTC, without bridges, wrappers or custodians. It targets Aave’s roughly $5 billion of WBTC supply. Security reviews were listed from Coinspect, Sherlock, Zellic, ABDK and ZK Security, plus formal verification by Runtime Verification. Risk parameters and oracle details were left to a later request for comment.

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Sources:

• The Defiant: Aave schedules vote on Babylon native bitcoin collateral for V4

• CoinDesk: Crypto Week Ahead

• PANews: Aave DAO passes proposal to introduce native BTC collateral via Babylon

• Bitcoin.com: Aave DAO faces vote on native BTC collateral