{"id":91729,"date":"2025-12-03T16:10:49","date_gmt":"2025-12-03T13:10:49","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=91729"},"modified":"2025-12-03T16:34:25","modified_gmt":"2025-12-03T13:34:25","slug":"aave-to-integrate-bitcoin-staking","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/aave-to-integrate-bitcoin-staking\/","title":{"rendered":"Aave to Integrate Bitcoin Staking"},"content":{"rendered":"<p><a href=\"https:\/\/forklog.com\/en\/news\/the-etherisation-of-bitcoin-how-btcfi-affects-user-privacy\">BTCFi<\/a> project Babylon will launch bitcoin\u2011collateralised lending on <a href=\"https:\/\/forklog.com\/en\/news\/what-is-aave\">Aave<\/a> V4.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">What happens when the world\u2019s largest DeFi lending protocol meets trustless native Bitcoin collateral?<\/p>\n<p>A new era of BTC lending and borrowing, without wrappers, bridges, or custodians.<\/p>\n<p>Babylon and <a href=\"https:\/\/twitter.com\/aave?ref_src=twsrc%5Etfw\">@aave<\/a> are partnering to build the first native Bitcoin-backed Spoke on Aave V4. <a href=\"https:\/\/t.co\/NdU35gVMNS\">pic.twitter.com\/NdU35gVMNS<\/a><\/p>\n<p>\u2014 Babylon (@babylonlabs_io) <a href=\"https:\/\/twitter.com\/babylonlabs_io\/status\/1996161811167760610?ref_src=twsrc%5Etfw\">December 3, 2025<\/a><\/p><\/blockquote>\n<p> <script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>Users will be able to borrow in <a href=\"https:\/\/forklog.com\/en\/news\/what-are-stablecoins\">stablecoins<\/a> and other tokens against native bitcoin collateral, without bridges or <a href=\"https:\/\/forklog.com\/en\/news\/what-is-a-wrapped-token\">wrapped<\/a> assets.<\/p>\n<p>The core of the integration is the Babylon Bitcoin Vault. It allows digital gold to be locked on the main chain, while DeFi protocols create a cryptographically verifiable \u201ctwin\u201d to use as collateral.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>\u201cOur Bitcoin vaults operate without the need to trust intermediaries. This allows the use of Bitcoin itself in DeFi, not its substitutes, while fully preserving the main advantage \u2014 the absolute security of the network. Integration with Aave V4 is exactly the meaningful application that immediately shows the strength of our technology,\u201d commented Babylon co-founder David Tse.\u00a0<\/em><\/p>\n<\/blockquote>\n<p>The release notes that collateralised lending was in high demand in 2025. Loans secured by the first cryptocurrency exceeded $1bn. The Babylon team expects the figure to keep rising as institutional interest grows.\u00a0<\/p>\n<p>For now the options are limited: most activity runs through centralised platforms or uses wrapped versions of the asset. That entails counterparty risk and the loss of key bitcoin properties, the developers noted.\u00a0<\/p>\n<h2 class=\"wp-block-heading\">The state of BTCFi\u00a0<\/h2>\n<p>Babylon is the leading BTCFi project by total value locked at $5.1bn. At its peak it reached $9bn.\u00a0<\/p>\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"448\" src=\"https:\/\/forklog.com\/wp-content\/uploads\/img-7e74e49df9099bf6-17078218433179-1024x448.png\" alt=\"image\" class=\"wp-image-271048\" srcset=\"https:\/\/forklog.com\/wp-content\/uploads\/img-7e74e49df9099bf6-17078218433179-1024x448.png 1024w, https:\/\/forklog.com\/wp-content\/uploads\/img-7e74e49df9099bf6-17078218433179-300x131.png 300w, https:\/\/forklog.com\/wp-content\/uploads\/img-7e74e49df9099bf6-17078218433179-768x336.png 768w, https:\/\/forklog.com\/wp-content\/uploads\/img-7e74e49df9099bf6-17078218433179-1536x672.png 1536w, https:\/\/forklog.com\/wp-content\/uploads\/img-7e74e49df9099bf6-17078218433179.png 1604w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Source: <a href=\"https:\/\/defillama.com\/protocol\/babylon-protocol\">DefiLlama<\/a>.\u00a0<\/figcaption><\/figure>\n<p>The entire decentralised\u2011finance segment on bitcoin stands at $6.6bn. The ecosystem lags far behind rivals such as Binance Smart Chain, <a href=\"https:\/\/forklog.com\/en\/news\/what-is-solana-sol\">Solana<\/a> and especially Ethereum:\u00a0<\/p>\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"221\" src=\"https:\/\/forklog.com\/wp-content\/uploads\/img-8a0f896a6333b206-17094757112548-1024x221.png\" alt=\"image\" class=\"wp-image-271049\" srcset=\"https:\/\/forklog.com\/wp-content\/uploads\/img-8a0f896a6333b206-17094757112548-1024x221.png 1024w, https:\/\/forklog.com\/wp-content\/uploads\/img-8a0f896a6333b206-17094757112548-300x65.png 300w, https:\/\/forklog.com\/wp-content\/uploads\/img-8a0f896a6333b206-17094757112548-768x165.png 768w, https:\/\/forklog.com\/wp-content\/uploads\/img-8a0f896a6333b206-17094757112548-1536x331.png 1536w, https:\/\/forklog.com\/wp-content\/uploads\/img-8a0f896a6333b206-17094757112548.png 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Source: <a href=\"https:\/\/defillama.com\/chains\">DefiLlama<\/a>.\u00a0<\/figcaption><\/figure>\n<p>Some <a href=\"https:\/\/forklog.com\/en\/news\/defi-seen-as-bitcoins-next-evolutionary-step\">consider<\/a> the field the next stage in the evolution of the first cryptocurrency. BTCFi surged initially, but the momentum faded in early 2025. TVL growth has since stagnated.\u00a0<\/p>\n<h2 class=\"wp-block-heading\">A new Aave initiative\u00a0\u00a0<\/h2>\n<p>The Aave <a href=\"https:\/\/forklog.com\/en\/news\/what-is-a-dao-decentralised-autonomous-organisation\">DAO<\/a> <a href=\"https:\/\/snapshot.org\/#\/s:aavedao.eth\/proposal\/0x0ad3115883faa738c9e8134f9ba6c3f43a168cb288e488b43fdb1af15fc04be2\">is debating<\/a> abandoning its multichain strategy. The protocol could exit <a href=\"https:\/\/forklog.com\/en\/news\/what-is-zksync\">ZKsync<\/a>, <a href=\"https:\/\/forklog.com\/en\/news\/metis-andromeda-an-overview-of-l2-solutions-with-the-lowest-fees\">Metis<\/a> and <a href=\"https:\/\/forklog.com\/en\/news\/sony-switches-on-soneium-mainnet\">Soneium<\/a>.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>\u201cEach separate Aave V3 deployment across multiple blockchains is an operational expense and a new attack vector for the protocol. Analysis shows that some of our instances do not pay for themselves: their revenues do not cover either the costs or the risks taken,\u201d the authors of the Aave Chan Initiative (ACI) noted.\u00a0<\/em><\/p>\n<\/blockquote>\n<p>According to them, the Metis project, whose co\u2011founder <a href=\"https:\/\/forklog.com\/en\/news\/token-linked-to-vitalik-buterins-mother-jumps-25-in-24-hours\">is<\/a> Vitalik Buterin\u2019s mother, Elena Sinelnikova, generates just over $3,000 a year. Soneium brings in about $50,000. By contrast, Aave\u2019s main deployment on Ethereum yields more than $142m.\u00a0<\/p>\n<p>Beyond low revenues, these networks also add operational overhead.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>\u201cListing new assets on some of them requires disproportionate engineering effort. Given the team\u2019s current workload and the extremely low payoff, maintaining this work now is not advisable,\u201d ACI explained.<\/em><\/p>\n<\/blockquote>\n<p>To address this, the developers proposed two measures:<\/p>\n<ul class=\"wp-block-list\">\n<li>set a $2m minimum annual revenue threshold for any new protocol deployment;<\/li>\n<li>introduce a \u201cReserve Factor\u201d for stablecoins in existing but low\u2011revenue networks. This means a portion of funds in \u201cstablecoins\u201d will be retained as reserves, boosting the pool\u2019s overall yield.<\/li>\n<\/ul>\n<p>A preliminary vote has 100% support; it closes on 5 December, after which a public discussion will begin.\u00a0<\/p>\n<p>In October, the Aave community <a href=\"https:\/\/forklog.com\/en\/news\/aave-community-proposes-50-million-token-buyback-program\">proposed<\/a> launching a buyback programme for AAVE tokens.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"<p>BTCFi project Babylon will launch bitcoin-collateralised lending on Aave V4.<\/p>\n","protected":false},"author":1,"featured_media":91730,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"The decentralised protocol teamed up with BTCFi project Babylon","creation_source":"ai_translated","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1212,18,1784,1289,1093],"class_list":["post-91729","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-aave","tag-bitcoin","tag-btcfi","tag-cryptocurrency-staking","tag-defi"],"aioseo_notices":[],"amp_enabled":true,"views":"189","promo_type":"1","layout_type":"1","short_excerpt":"The decentralised protocol teamed up with BTCFi project Babylon","is_update":"0","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/91729","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=91729"}],"version-history":[{"count":2,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/91729\/revisions"}],"predecessor-version":[{"id":91732,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/91729\/revisions\/91732"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/91730"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=91729"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=91729"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=91729"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}