Writing this as someone who comes from the Bitcoin world.
For years the standard answer for “BTC in DeFi” has been only one: wrap it.
WBTC works, but ~115k BTC sitting behind a custodial wrapper has always been the awkward compromise the ecosystem learned to live with.
Especially for the bitcoiners.
This could represent the first at-scale deployment of native BTC as productive collateral without that compromise. Babylon’s staking protocol already shows there’s real demand for the trustless model. ~52k BTC ($4B) staked natively, almost half of the entire WBTC supply, with BTC never leaving Bitcoin.
Extending that same self-custodial approach from staking to lending is the logical next step, and Aave V4’s Hub and Spoke Design is the perfect match.
The WBTC angle is also worth highlighting: Aave is the largest BTC reserve in DeFi (~$2.5B WBTC supplied, historically underutilized on the borrow side). Routing post-liquidation settlement through WBTC turns this integration into actual borrow demand for an asset already used in size within Aave Protocol.
Supportive at Temp Check.