Babylon and HashKey Cloud Partner to Bring Native Bitcoin Collateral to Aave v4

Babylon Labs and HashKey Cloud are developing an integration to enable native Bitcoin borrowing within Aave v4. The system utilizes Babylon's Trustless Bitcoin Vaults architecture, allowing users to lock native BTC in self-custodial vaults to borrow assets including USDC, USDT, and WBTC without bridges, wrapped tokens, or centralized custodians. Collateral is tracked on Ethereum through an internal, transfer-restricted ERC-20 unit known as vaultBTC. The feature is currently live on the Aave v4 public testnet, with full commercial mainnet deployment pending Aave DAO governance discussions and an official vote.