Finance Share Share this article Copy linkX (Twitter)LinkedInFacebookEmail Babylon’s Trustless Vaults to Add Finance Share Share this article Copy linkX (Twitter)LinkedInFacebookEmail Babylon’s Trustless Vaults to Add

Babylon’s Trustless Vaults to Add Native Bitcoin-Backed Lending Through Aave

2025/12/03 18:00
5 min read
Share
Share this article
Copy linkX (Twitter)LinkedInFacebookEmail

Babylon’s Trustless Vaults to Add Native Bitcoin-Backed Lending Through Aave

Babylon is also planning to introduce Bitcoin-backed DeFi insurance, letting BTC holders earn yield while underwriting risk against hacks and exploits.

By Jamie Crawley, AI Boost|Edited by Stephen Alpher
Dec 3, 2025, 10:00 a.m.
David Tse, co-founder of Babylon (Bradley Keoun, modified by CoinDesk)

What to know:

  • Aave V4 will support native bitcoin collateral via Babylon’s trustless Bitcoin Vaults, removing the need for wrapped BTC or custodial intermediaries.
  • The move opens Aave to a far larger pool of BTC liquidity, with broader adoption expected as the bitcoin borrowing market grows.
  • Babylon is preparing to introduce bitcoin-backed DeFi insurance, letting BTC holders earn yield while underwriting protocol risk.

Bitcoin staking project Babylon has teamed up with the largest decentralized lending protocol Aave, allowing BTC to be used directly as collateral without wrapping or centralized custody.

Beyond lending, Babylon is also preparing to extend its vault design into decentralized finance (DeFi) insutance, allowing BTC to serve as collateral for coverage against protocol hacks. BTC would be deposited into insurance pools would earn yield if no payouts occur, while providing liquidity for claims when hacks happen.

STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
Sign me up

That initiative is in development and expected to be announced by January 2026, Babylon co-founder David Tse told CoinDesk in an interview.

Babylon and Aave team up to reshape BTC lending

Although BTC-backed lending has become a multibillion-dollar sector, much of that activity relies on custodial models, whereby users are given a tokenized version of the bitcoin. Even the largest of these — Wrapped Bitcoin (WBTC) — constitutes far less than 1% of bitcoin's total market cap, a key limitation for DeFi protocols hungry for deeper liquidity.

Unlocking native BTC, as opposed to a wrapped version of bitcoin, could reshape lending markets, Tse told CoinDesk.

"Even 5% of Bitcoin’s supply entering lending protocols would be enormous compared to what’s available today," Tse said.

Babylon’s own Bitcoin staking product secures over 56,000 BTC ($5.15 billion), suggesting healthy demand for productive BTC use cases. Users, Tse said, "want to hold Bitcoin while earning on it," and lending is the most natural starting point.

The project is teaming up with Aave to combine the former's trustless vaults — which enable native bitcoin to be put to work elsewhere in the blockchain ecosystem — and the latter's "hub and spoke" architecture. Babylon will build a dedicated Bitcoin-backed "spoke" into Aave’s lending "hub", enabling users to deposit actual Bitcoin on its base chain while borrowing stablecoins and other assets on Aave’s markets.

Testing is set to begin in early 2026, with a view to unveiling the product around April.

BabylonAaveLending
AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk's full AI Policy.

More For You

Protocol Research: GoPlus Security

Commissioned byGoPlus

What to know:

  • As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M.
  • GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month.
  • Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B.
View Full Report

More For You

Yi He, Arguably Crypto's Most Powerful Woman, Becomes Binance’s New Co-CEO

The new leadership role was announced by the current Binance CEO Richard Teng at Binance Blockchain Week in Dubai.

What to know:

  • Yi He’s co-leadership role will also complement the steady hand of Teng, a former regulator who has guided the firm through recent enforcement actions.
  • Yi He’s innovative and user-focused approach has been instrumental in shaping the company’s vision, culture, and bottom-up business strategy, said Binance CEO Richard Teng.
Read full story
Latest Crypto News

Strategy Faces Possible MSCI Index Removal, Threatening Billions in Outflows: Reuters

Taiwan Authorities Say Island's First Regulated Stablecoin Will Debut Next Year

BlackRock's Spot Bitcoin ETF Options Secure U.S. Top 10 Ranking With 7.7M Active Contracts

Yi He, Arguably Crypto's Most Powerful Woman, Becomes Binance’s New Co-CEO

This Bitcoin-Led, Institutionally Anchored Cycle Shows the Three-Month Drop Isn’t a Winter: Glassnode

Dogecoin Posts Strongest Move in Weeks. Is $0.15 the Next Target?

Top Stories

Yi He, Arguably Crypto's Most Powerful Woman, Becomes Binance’s New Co-CEO

Ether 'Bear Trap' Confirmed as Bitcoin Probes $93K, XRP Eyes $2.30 Hurdle

SOL, ADA, XRP Zoom 12% as Bitcoin Bounces Above $93K. But Will The Rally Last?

This Bitcoin-Led, Institutionally Anchored Cycle Shows the Three-Month Drop Isn’t a Winter: Glassnode

Strategy Faces Possible MSCI Index Removal, Threatening Billions in Outflows: Reuters

Taiwan Authorities Say Island's First Regulated Stablecoin Will Debut Next Year

Market Opportunity
AaveToken Logo
AaveToken Price(AAVE)
$122.46
$122.46$122.46
0.00%
USD
AaveToken (AAVE) Live Price Chart
Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact service@support.mexc.com for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.

You May Also Like

The Cognitive Factory: Redefining Industrial Production in 2026

The Cognitive Factory: Redefining Industrial Production in 2026

The manufacturing landscape of 2026 has transitioned from “Smart” to “Cognitive.” While the previous decade focused on connecting machines to the internet, the
Share
Techbullion2026/02/20 00:32
How to earn from cloud mining: IeByte’s upgraded auto-cloud mining platform unlocks genuine passive earnings

How to earn from cloud mining: IeByte’s upgraded auto-cloud mining platform unlocks genuine passive earnings

The post How to earn from cloud mining: IeByte’s upgraded auto-cloud mining platform unlocks genuine passive earnings appeared on BitcoinEthereumNews.com. contributor Posted: September 17, 2025 As digital assets continue to reshape global finance, cloud mining has become one of the most effective ways for investors to generate stable passive income. Addressing the growing demand for simplicity, security, and profitability, IeByte has officially upgraded its fully automated cloud mining platform, empowering both beginners and experienced investors to earn Bitcoin, Dogecoin, and other mainstream cryptocurrencies without the need for hardware or technical expertise. Why cloud mining in 2025? Traditional crypto mining requires expensive hardware, high electricity costs, and constant maintenance. In 2025, with blockchain networks becoming more competitive, these barriers have grown even higher. Cloud mining solves this by allowing users to lease professional mining power remotely, eliminating the upfront costs and complexity. IeByte stands at the forefront of this transformation, offering investors a transparent and seamless path to daily earnings. IeByte’s upgraded auto-cloud mining platform With its latest upgrade, IeByte introduces: Full Automation: Mining contracts can be activated in just one click, with all processes handled by IeByte’s servers. Enhanced Security: Bank-grade encryption, cold wallets, and real-time monitoring protect every transaction. Scalable Options: From starter packages to high-level investment contracts, investors can choose the plan that matches their goals. Global Reach: Already trusted by users in over 100 countries. Mining contracts for 2025 IeByte offers a wide range of contracts tailored for every investor level. From entry-level plans with daily returns to premium high-yield packages, the platform ensures maximum accessibility. Contract Type Duration Price Daily Reward Total Earnings (Principal + Profit) Starter Contract 1 Day $200 $6 $200 + $6 + $10 bonus Bronze Basic Contract 2 Days $500 $13.5 $500 + $27 Bronze Basic Contract 3 Days $1,200 $36 $1,200 + $108 Silver Advanced Contract 1 Day $5,000 $175 $5,000 + $175 Silver Advanced Contract 2 Days $8,000 $320 $8,000 + $640 Silver…
Share
BitcoinEthereumNews2025/09/17 23:48
Why The Green Bay Packers Must Take The Cleveland Browns Seriously — As Hard As That Might Be

Why The Green Bay Packers Must Take The Cleveland Browns Seriously — As Hard As That Might Be

The post Why The Green Bay Packers Must Take The Cleveland Browns Seriously — As Hard As That Might Be appeared on BitcoinEthereumNews.com. Jordan Love and the Green Bay Packers are off to a 2-0 start. Getty Images The Green Bay Packers are, once again, one of the NFL’s better teams. The Cleveland Browns are, once again, one of the league’s doormats. It’s why unbeaten Green Bay (2-0) is a 8-point favorite at winless Cleveland (0-2) Sunday according to betmgm.com. The money line is also Green Bay -500. Most expect this to be a Packers’ rout, and it very well could be. But Green Bay knows taking anyone in this league for granted can prove costly. “I think if you look at their roster, the paper, who they have on that team, what they can do, they got a lot of talent and things can turn around quickly for them,” Packers safety Xavier McKinney said. “We just got to kind of keep that in mind and know we not just walking into something and they just going to lay down. That’s not what they going to do.” The Browns certainly haven’t laid down on defense. Far from. Cleveland is allowing an NFL-best 191.5 yards per game. The Browns gave up 141 yards to Cincinnati in Week 1, including just seven in the second half, but still lost, 17-16. Cleveland has given up an NFL-best 45.5 rushing yards per game and just 2.1 rushing yards per attempt. “The biggest thing is our defensive line is much, much improved over last year and I think we’ve got back to our personality,” defensive coordinator Jim Schwartz said recently. “When we play our best, our D-line leads us there as our engine.” The Browns rank third in the league in passing defense, allowing just 146.0 yards per game. Cleveland has also gone 30 straight games without allowing a 300-yard passer, the longest active streak in the NFL.…
Share
BitcoinEthereumNews2025/09/18 00:41