Babylon has partnered with Aave to launch native Bitcoin-collateralized lending, scheduled to go live in April 2026.

according to CoinDesk, Babylon announced a partnership with the decentralized lending protocol Aave to support native Bitcoin as collateral in Aave V4, without the need for wrapped tokens or custodial intermediaries.

This collaboration will combine Babylon's trustless vaults with Aave's "center-radiated" architecture, allowing users to deposit native BTC on the Bitcoin base chain while borrowing stablecoins and other assets in the Aave market. Testing is expected to begin in early 2026, with the product planned for launch in April.

Babylon co-founder David Tse stated that even if 5% of Bitcoin's supply enters lending protocols, the scale will far exceed the current market.