Babylon Labs announced a partnership through which HashKey Cloud will integrate its Trustless Bitcoin Vaults (TBV). This infrastructure allows Bitcoin holders to use their native BTC as loan collateral and directly access Aave v4 liquidity markets without the need for wrapped tokens, cross-chain bridges, or centralized intermediaries.
The integration eliminates traditional custody risks and technical friction within the burgeoning BTCfi ecosystem. Through Babylon’s self-custodial vaults on the Bitcoin network, institutional and retail users can lock their capital to borrow stablecoins (such as USDC or USDT) within Aave, optimizing capital efficiency and unlocking passive yields while retaining full exposure to BTC.
With the technology already operational in testing phases with Aave v4, HashKey Cloud plans to roll out these institutional lending and yield services in the coming months, cementing Bitcoin as a premier productive asset within decentralized finance (DeFi).
Source: https://babylonlabs.io/blog/hashkey-cloud-to-integrate-babylon-trustless-bitcoin-vaults
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