Overview
- Babylon will build a dedicated Bitcoin-backed spoke into Aave’s hub so users can deposit native BTC on Babylon’s chain and borrow assets on Aave.
- Through trustless, time-locked vaults, users keep control of their Bitcoin keys without wrapping or centralized custody.
- Babylon is developing BTC-backed DeFi insurance that would use pooled native BTC to underwrite hack payouts, with an announcement expected in January 2026.
- No live lending or insurance products from this collaboration are deployed yet as integration moves toward testing in early 2026.
- Wrapped-Bitcoin supplies remain under 1% of Bitcoin’s market cap, while Babylon reports securing over 56,000 BTC, highlighting the potential to deepen DeFi liquidity.