Babylon Labs submitted a governance proposal to the Aave community on October 14, 2026 seeking to onboard native Bitcoin as collateral on Aave V4, using a system the company calls Trustless Bitcoin Vaults. The design's core promise is that depositors never have to wrap, bridge, or hand their bitcoin to a custodian to use it as collateral on Aave, addressing one of the longest-standing frictions in bringing Bitcoin's liquidity into Ethereum-based DeFi lending markets.