LlamaRisk: Babylon's native Bitcoin market on Aave V4 still relies on WBTC for liquidations
- —Babylon application liquidation fee is 0.5% of liquidation bonus profit
- —Even with zero fees, a WBTC-denominated loan still requires WBTC repayment
- —Addresses published as of Oct. 25 are Sepolia testnet deployments, not mainnet
- —Direct liquidation triggers BTC redemption, but proof-and-challenge takes several days
Why it matters: The design will test whether Aave can scale lending against native BTC without leaning on centralized WBTC.
Source: CryptoSlate