Babylon Labs proposes native Bitcoin lending on Aave V4

Babylon Labs submitted a proposal to allow users to borrow stablecoins on Aave V4 using native Bitcoin as collateral. Users would lock BTC in vaults on the Bitcoin network, receiving a non-transferable token on Ethereum as a receipt, while the BTC remains on its native chain without bridging. Aave DAO would receive the first $500,000 in annual revenue from the integration if approved.