Aave Proposes Native Bitcoin Collateral Without Custodians or Wrapped Tokens
Babylon Labs' proposal aims to enable Bitcoin-backed loans on Aave V4 using a trustless vault system.
Babylon Labs' proposal aims to enable Bitcoin-backed loans on Aave V4 using a trustless vault system. Bitcoin (BTC) is trading at ₹77,11,398 ($81,108.00). This is an original Token Times brief based on reporting by NewsBTC, with live market data added, as of Sun, 18 Oct 2026 17:15:01 UTC.
This development could significantly expand Aave's lending capabilities by allowing users to leverage their Bitcoin holdings without intermediaries or token wrapping, potentially increasing platform liquidity and user trust.
- Babylon Labs proposes using Trustless Bitcoin Vaults for Aave V4.
- Proposal would enable BTC-backed loans without custodians or wrapped tokens.
- Aave's TVL stands at $17.83B, down 3.2% over the past week.
- Babylon Proposes Native Bitcoin Lending on Aave V4
- Aave Proposes Native Bitcoin Collateral Without Custodians or Wrapped Tokens — this brief
Babylon Labs has advanced a proposal to integrate native 
Bitcoin collateral into 
Aave V4, utilizing a system of Trustless Bitcoin Vaults. This design allows users to lock BTC into a Taproot-based arrangement on the Bitcoin network while Aave V4 records restricted collateral units within a dedicated lending market.
The proposal aims to eliminate the need for custodians or the conversion of Bitcoin into wrapped tokens, which are commonly used in DeFi platforms. This could provide users with a more direct and potentially safer way to leverage their Bitcoin holdings for borrowing stablecoins.
The proposal is currently under community review and requires further governance votes and risk analysis before it can be implemented. This process ensures that the Aave community has a say in the integration of such a significant feature.
Aave's Total Value Locked (TVL) is currently $17.83B, according to DeFiLlama, marking a 3.2% decrease over the past week. This indicates that while the platform remains a major player in the DeFi space, it is not immune to broader market fluctuations.
The overall crypto market is relatively flat, with a total market cap of $2.78T. Bitcoin is trading at $81,062, down 0.32% in the last 24 hours, while Aave's native token, AAVE, is at $149.55, down 1.91% in the same period.
Since this brief published about 1 hour ago, Bitcoin (BTC) has moved from ₹77,07,024.53$81,062.00 to ₹77,11,398.01$81,108.00 — +0.06%.
The chart plots BTC's price: grey is the move before this brief published, the vertical dashed line marks the moment it published, the horizontal dashed line is the price then, and the coloured area is the move since — from Token Times's market data (daily resolution). It shows what happened after the news, not that the news caused it; many factors move prices. Not financial advice.
Will Bitcoin dip to $80,000 October 12-18?
Crowd-implied probability on Polymarket, ₹9.36M 24h volume, resolves Oct 19 — snapshotted when this brief published (Oct 18 16:05 UTC). A market price reflects what traders collectively expect; it is not a forecast by Token Times and will have moved since. View the market ↗
At today's peer-to-peer rate, 1 BTC ≈ ₹8.52M (about $81,108.00), down 0.1% over 24 hours. The rupee itself trades about 10.5% above the official rate on the P2P market, so a Indian buyer's effective cost differs from the headline dollar price.
Live market data
Current prices for the assets in this story — live, source-stamped, updated every 15 minutes.
Figures and sectors in this story, checked live against on-chain aggregators · October 18, 2026.
Token Times reads these figures directly from on-chain aggregators (DeFiLlama, mempool.space) at build time — independent of what any outlet reported. Sector totals aggregate every protocol DeFiLlama tracks in that category. Values are live and will change.
Aave Proposes Native Bitcoin Collateral Without Custodians o — questions & answers
What is the main goal of the Babylon Labs proposal?
The proposal aims to enable Bitcoin-backed loans on Aave V4 without custodians or wrapped tokens.
How does the Trustless Bitcoin Vault system work?
Users lock BTC into a Taproot-based arrangement on the Bitcoin network, while Aave V4 records restricted collateral units in a dedicated lending market.
What is the current status of the proposal?
The proposal is under community review and requires governance votes and risk analysis before implementation.
How much is 1 Bitcoin worth in rupee today?
About ₹8.52M at the live peer-to-peer (P2P) USDT rate, which is what Indians typically trade at — equivalent to roughly $81,108.00. The rupee price moves with both BTC's US-dollar price and the USDT/INR rate; use our Bitcoin in rupee page for any amount.
Has Bitcoin's price moved since this brief was published?
BTC is up 0.06% since this brief first published — trading at ₹77,11,398 ($81,108.00) now versus ₹77,07,025 ($81,062.00) at publication. Token Times re-checks this figure against CoinGecko and Binance every 15 minutes.
Which outlets reported this story?
This is an original Token Times brief that synthesises reporting from NewsBTC. It is not a copy of any one article — follow the source links above for the original reporting.
Original summary — not financial advice. This is an original Token Times brief that summarises a development reported elsewhere and adds live market data for context; it is not the original article and reproduces no part of it. Follow the source link above for full details. Crypto is volatile and high-risk — always do your own research.