Babylon Advances Native Bitcoin Collateral Plan for Aave V4

Babylon has advanced a proposal to enable native Bitcoin as collateral on Aave V4, while using WBTC to settle permissionless liquidations. The plan would keep collateral on the Bitcoin network but rely on wrapped Bitcoin for liquidation mechanics, with risk settings and further governance votes still pending. The development is an early-stage governance proposal rather than a finalized integration, so it has limited immediate market impact, though it signals growing interest in bringing Bitcoin liquidity into DeFi lending markets.