Aave: ARFC proposes native Bitcoin collateral for V4 - 14 Oct 2026

An ARFC scheduled for 14 Oct 2026 proposes native Bitcoin collateral on Aave V4 through Babylon Trustless Bitcoin Vaults. The proposal includes two new Spokes, revenue sharing, and buybacks of AAVE and BABY.

The proposed revenue sharing and buybacks would connect Bitcoin capital inflows with the economics of both tokens. This makes the proposal broader than adding a collateral asset: it also sets out how the arrangement would direct revenue toward AAVE and BABY buybacks. Implementation remains subject to Aave governance approval and risk review, so the proposed collateral access and associated token flows are not yet established.

Today, we published an ARFC on the @aave governance forum to propose native Bitcoin to Aave V4 as collateral through Babylon Trustless Bitcoin Vaults (TBV).

The proposal includes two new Aave V4 Spokes; Babylon Spoke and BTCVault Swap Spoke for borrowing and liquidation… pic.twitter.com/UYmWYcIwYi

Oct 14, 2026