Babylon partners with Aave to offer unwrapped BTC as collateral

Babylon is partnering with crypto lending protocol Aave to enable the use of Bitcoin as direct DeFi collateral without the need for wrapping, CoinDesk reported. The project also plans to expand its BTC collateral framework into the DeFi insurance sector. Under this model, users could deposit BTC into an insurance pool to be used for payouts in the event of a hacking incident, earning a yield if no claims are made.