The Bitcoin ecosystem has new developments. Babylon recently announced the completion of a $15 million funding round led by the well-known a16z crypto. The project is backed by two Stanford professors, David Tse and Fisher Yu, who have been exploring ways to involve Bitcoin in DeFi without relinquishing control of their assets since 2021.

BTCVaults is their proposed solution, essentially a decentralized protocol. In simple terms, through this mechanism, token holders can use Bitcoin as collateral for borrowing or earning yields, while still retaining control of their private keys.

What’s more noteworthy is that Babylon has already planned the next step—aiming to integrate with Aave in Q2 2026. Aave is a leading player in the lending ecosystem. Once this partnership is realized, it will allow Bitcoin holders to directly perform related operations on Aave via Babylon, which will significantly boost Bitcoin’s penetration into DeFi.